Significant shifts have been observed in the timings of key life milestones, according to a new study.
The report reveals that younger generations are experiencing these critical moments – such as leaving school, having their first child, buying their first home, and paying off their mortgage – significantly later than their counterparts did in previous decades.
The data, compiled by interactive investor and sourced from the ONS, English housing survey, and UK finance data, shows a clear trend towards delaying milestones.
Commenting on the study, Alice Guy, head of pensions and savings at interactive investor, said: “The key milestones in life are all getting later, and it will have a knock-on impact on our wealth and retirement decisions.”
She continued: “The school leaving age has crept up over the years, meaning that most young people start their first full-time job later, often in their early 20s. Most women are waiting longer to start a family, often deciding to save up first or buy a first home before having kids. Bringing up children is an expensive business, and many women wait until they’re financially stable before starting a family.”
The report shows that the average age of first-time homebuyers is now 34, up from 24 in the 1950s. According to Guy, this delay in home-buying could have significant financial implications.
“Young people are also waiting longer to buy a home and more people are renting than previous generations. Taking longer to get on the housing ladder can have a knock-on impact on retirement saving as paying off your mortgage into your 50s or even 60s can make it harder to build pension wealth.”
The study also showed a shift in later life milestones, particularly retirement ages. The average retirement age has gradually increased over the years, and Guy warns that this trend could have far-reaching consequences.
“Rising mortgage terms mean more of us will still have housing costs in retirement in the future. We’ll have to wait and see what this means for retirement ages, but it could mean more of us need to work much longer to pay the bills,” Guy warned.
Additionally, the study highlights a disparity between genders in retirement savings.
“More women are working alongside bringing up children and this is good news for their pension savings. Although they still often enter retirement with a much lower private pension than men,” Guy added.
Despite the general trend of delay, the path to these milestones remains varied. Many people continue to rent throughout their lives, choose not to marry, or decide not to have children. The impact of these life choices on financial stability and retirement planning is an area of ongoing study.
“The good news is that retirees in the future are more likely to have a workplace pension than current retirees. Auto-enrolment was introduced in 2012 and meant that, for the first time, all employers had to offer workplace pensions for their staff,” said Guy, offering a note of optimism in a landscape of shifting trends.
