Young people bear the brunt of recession

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YORKSHIRE has seen one of the biggest falls in income during the recession which hit young adults hardest of all, according to a new report.

The average income in the region has fallen by 5.2 per cent before housing costs are taken into account since the start of the downturn.

Only Northern Ireland has a lower average weekly household income than Yorkshire.

Underlining the problems facing young people trying to get on the housing ladder, the study by the respected Institute for Fiscal Studies and backed by the York-based Joseph Rowntree Foundation, found home ownership among 25-year-olds has halved over the last 20 years.

Young people saw their average incomes fall by 13 per cent during the downturn compared to seven per cent for older workers.

Chris Goulden, head of poverty research at the Joseph Rowntree Foundation, said: “Over the past year young people aged between 22 and 30 in particular have fared the worst, seeing the sharpest rise of those now living in poverty.

“This is in contrast to pensioners, who the IFS say face relatively favourable conditions. The progress in reducing pensioner poverty shows what can be done with sustained effort - a principle that must apply across all age groups.

“The IFS report makes clear the worst is yet to come for struggling households - this year’s figures do not factor in the large scale welfare cuts introduced from April 2013. Even at a time where resources are limited, measures can be taken to reduce the hardship now facing almost a quarter of households.”

The report shows the recession would have hit young people harder if it was not for the fact that a quarter of those aged between 22 and 30 live with their parents.

Young people also saw the biggest fall in housing costs because of low mortgage rates, which favour those with the most mortgage debt, and a decline in private sector rents.

The report also highlights a fall in the number of people behind on payments for their household bills from almost ten per cent in 2010 to 8.1 per cent last year.

Jonathan Cribb, a research economist at the IFS and an author of the report, said: “Young adults have borne the brunt of the recession.

“Pay, employment and incomes have all been hit hardest for those in their 20s.

“A crucial question is whether this difficult start will do lasting damage to their employment and earnings prospects”.

The IFS report shows that average income have stablised in the last two years but remain between 3.6 per cent and 5.8 per cent lower than their peak, depending on how they are measured.

Those figures are likely to form a central part of Labour’s attack going into the next election campaign as it seeks to show that while the UK economy is improving in statistical terms families are not seeing a material improvement in their standard of living.