A group of younger UK workers is seeing a notable improvement in pay, challenging long-held expectations that they would be financially worse off than earlier generations. New analysis suggests that some people in their mid-twenties are now earning more than millennials did at the same age, and in some cases more than any comparable generation going back decades.
Research from the Resolution Foundation shows that workers born in the late 1990s and early 2000s are experiencing stronger early-career pay outcomes than those who entered the workforce after the 2008 financial crisis. The findings offer a more optimistic picture for parts of Generation Z after years of concern about housing costs, weak economic growth, and higher taxes limiting living standards.
Findings
According to the think tank’s analysis, real weekly pay at age 24 for people born in the late 1990s is around 12 percent higher than for those born in the late 1980s at the same age.
More strikingly, people born in the early 2000s are now earning more at age 24 than any generation at that age since the 1950s. This places today’s youngest workers ahead of both millennials and earlier cohorts when measured at a similar point in their working lives.
Context
Millennials, generally defined as those born between the early 1980s and the mid-1990s, were heavily affected by the financial crisis and the long period of weak wage growth that followed. Many began their careers during a downturn that limited pay progression and job opportunities.
As a result, millennials became the first generation in modern times not to see higher disposable incomes than their parents. Concerns have persisted that Generation Z would face the same pattern.
Recovery
The Resolution Foundation suggests that Generation Z has benefited from a modest pay recovery following the damage caused by the 2008 crisis. With the oldest members of Gen Z now several years into their careers, recent data points to stronger wage growth in their early working years.
Charlie McCurdy, senior economist at the Resolution Foundation, said that while stagnating living standards for millennials are well documented, assumptions that the same would apply to Gen Z may be premature. He noted that by their mid-twenties, Gen Z workers are earning more than any comparable generation since the 1950s.
Caution
Despite the positive data, the think tank warned that the improvement may not last. Rising energy prices and weaker economic growth linked to tensions in the Middle East could lead to renewed pressure on household finances.
It also noted that real wage growth in the private sector has already slowed since last autumn, raising questions about how durable the current gains will be.
NEETs
Alongside the pay data, the Resolution Foundation highlighted concerns about the number of young people not in employment, education, or training, often referred to as NEETs.
Earlier this year, the number of 16 to 24 year olds in this category exceeded one million. This points to ongoing challenges facing a significant share of young people, even as others see improvements in pay.
Mr McCurdy said addressing the NEETs issue is essential for ensuring more Gen Z workers can build stable careers and sustain higher living standards over time.
Outlook
The findings suggest that while parts of Generation Z are currently outperforming millennials on pay at a similar age, the picture remains uneven. Stronger early earnings do not guarantee long-term financial security, particularly if economic conditions worsen.
For now, the data provides a more balanced view of younger workers’ prospects, combining encouraging signs on wages with ongoing concerns about job access and economic stability.
FAQs
Which birth years are seeing higher pay?
Workers born in the late 1990s and early 2000s.
How does Gen Z pay compare to millennials?
Gen Z earns more in their mid-twenties than millennials did.
What caused this pay improvement?
A modest recovery in wages after the financial crisis.
Is this pay growth expected to continue?
It may slow due to weaker growth and higher prices.
