Millennials, the Bank of Mum and Dad and debit card rip-offs

New research suggests that millennials will be the first generation to earn less than their predecessors over the course of their working lives.

The Resolution Foundation found that under-35s earned £8,000 less in their 20s than Generation X workers. If wages for millennials follow the same path as Generation X, average career earnings will be about £825,000. Even if millennials’ wages improved rapidly like those of their baby boomer parents born after World War Two, their lifetime earnings would be about £890,000, according to the foundation. There’s more bad news for millennials: the Resolution Foundation also estimates that they will spend £44,000 more on rent by the time they reach 30 than baby boomers did. A combination of falling homeownership levels and the rising cost of renting meant that people born between 1981 and 2000 would pay £53,000 in rent before their 30th birthday. In contrast, those born between 1946 and 1965 typically spent £9,000, in today’s money. Economy

The UK economy may face ‘severe loss of momentum’ after the vote to leave the EU, according to the EY Item Club. The think tank’s UK growth forecast for 2016 has been cut from 2.3 per cent to 1.9 per cent, and from 2.6 per cent to just 0.4 per cent for 2017. Meanwhile its forecast for GDP growth for 2018 was slashed from 2.4 per cent to 1.4 per cent.

Its report said the Brexit vote would have ‘severe confidence effects on spending and business investment’, which would lead to anaemic GDP growth over the next three years. Meanwhile, the number of shoppers on the high street saw the sharpest fall in more than two years in June, a 2.8 per cent fall on the same month in 2016, according to the British Retail Consortium. Bank of Mum and Dad The Observer reported yesterday that the Bank of Mum and Dad – the lender of last resort for grown-up children unable to afford a deposit to buy a home – has moved into the private rentals market. The country’s housing crisis has become so acute that parents are now having to subsidise their children’s rent to the tune of £1 billion a year. Research by the housing charity Shelter says that 450,000 adults need help from their parents to keep them in their rented home. An analysis of almost 4,000 adult people who rent carried out by YouGov suggests that more than one in 20 have either borrowed or received money from their parents this year to pay their rent or help them with moving costs. Younger people are particularly reliant on their parents for help, with 11 per cent of those aged 18-24, and 8 per cent of those aged 25-34, receiving financial support. Shelter estimates that this amounts to about £850 million a year on rent and £150 million a year on moving costs. Pensions The Times reports that the number of investigations launched by the Pensions Regulator into employers avoiding support for pension schemes has more than halved in recent years. The regulator, which is under pressure to take a hard line against Sir Philip Green over the BHS collapse and its pension fund deficit, undertook 23 investigations in 2013 but only eight last year, the least since before 2010. The figures, released under the Freedom of Information Act, also show that the watchdog exercised powers to claw back money on six occasions in the past six and a half years. Shopping Reports of the lingering death of ‘bricks and mortar’ shops appear to have been exaggerated, according to research that shows 89 per cent of all retail sales in the UK ‘touched’ a physical store last year. Despite internet shopping accounting for 15 per cent of all retail sales and though British shoppers buy more online per head of population than any other developed economy, the value of physical stores has not diminished, according British Land and Verdict. Debit cards The Daily Mail claims that holidaying families are being ripped off by stealth charges of up to 30 per cent for using debit cards abroad. Banks are cashing in on a rise in tourists using contactless cards for smaller purchases at shops and restaurants.

Its investigation also revealed companies such as Lloyds, TSB, Bank of Scotland and the Co-op are charging unsuspecting account holders as much as an extra £2.25 for taking out just ten euros at cash machines.

Retirement

Up to three million people of working age who are planning to use the value of their home to fund their retirement instead of a pension could be heading for a shock, according to new research from Royal London.