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Generation to lose out on rise in living standards

THE children of the 1960s and 1970s will only be better off than the previous generation when they retire if they inherited wealth, a leading economic think tank has found.

The Institute for Fiscal Studies (IFS) said that, compared to their counterparts from 10 years earlier, people born in the 1960s and 1970s will, on average, see no increase in their income or savings, be less likely to own a home and will have smaller private pensions.

In addition, the only way their ­financial position will improve will come through inheritance. About 70% of those born in the late-1970s are expected to receive an inheritance, compared to 28% of those born in the early-1940s. A rise in incomes and living standards has been enjoyed by successive generations since the end of the Second World War.

The IFS found the incomes of ­working-age adults born in the 1960s and 1970s were no higher in real terms than those of their counterparts when they were the same age a decade ago.

While the 1960s and 1970s ­generation enjoyed higher incomes when younger, they spent more. They suffered from the move from final-salary pension schemes to less generous money-purchase plans and the state pension will make up a smaller proportion of their previous earnings. They also took longer to get on the housing ladder.

While they are more likely to inherit, those already the wealthiest are set to receive the most.

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