Gen Z paid more than millennial predecessors but would still rather stay at ‘hotel of mum

Gen Z workers are earning more than their millennial predecessors but would rather stay at the ‘hotel of Mum and Dad’ than pay sky-high rents or mortgages, new research shows.

The analysis reveals that twentysomethings in work are enjoying more comfortable living standards – partly because of staying with their parents.

It finds that incomes for those born between 1996 and 2000 are 15 per cent – or £3,700 – greater than they were for those born a decade earlier.

Yet they are increasingly choosing not to fly the nest.

The Resolution Foundation report finds that Gen Z ‘has become the stay-at-home generation’ with 63 per cent of those aged 20 to 24 now living in the family home – up from 51 per cent 15 years ago.

Even those aged 25 to 29 are still increasingly relying on mum and dad to keep a roof over their heads with the share of this group now standing at 24 per cent, up from 19 per cent in 2011.

Nearly two-thirds of 20 to 24 year olds now live at home

The report said: ‘The growing popularity of ‘hotel of Mum and Dad’ is due to other forms of housing being out of reach, with impracticably high rents and house prices.’

It revealed that the proportion of twentysomethings who privately rent has been falling while they are also far less likely to own their own homes than those born in the 1980s or 1990s.

And while prolonged stays at ‘Hotel Mum and Dad’ ought to make it easier for them to save for a deposit there was evidence that they were still reliant on the ‘Bank of Mum and Dad’ to help them get a foot on the housing ladder.

The analysis showed that around one third of first-time buyers had parental help last year, up by around 20 percentage points from two decades ago.

Gen Z’s financial good fortune compared with millennials is partly due to the fact that the latter came of age in the aftermath of the late-2000s financial crisis. And lower earning twentysomethings have also been boosted by recent sharp rises in the minimum wage.

But the report said there were ‘reasons for caution’ with younger generations – born from 2001 – looking to be on a lower income path than those born a few years earlier.

And the picture is even worse for those who cannot even get a job as youth unemployment soars, with the number of 16 to 24-year-olds classified as not in employment, education or training (NEETs) recently soaring past a million,

‘The UK’s growing NEETs crisis casts an ominous shadow over recent progress on incomes,’ the report said.

Lalitha Try, Economist at the Resolution Foundation, said: ‘Gen Z are earning more in their early careers than their millennial counterparts, giving them a living standards boost.

‘But they are far more likely to still live with parents, with almost two-thirds of those aged 20 to 24 now calling Hotel Mum and Dad home.

‘Impracticably high rents and house prices have driven this boom.’