Millennials set to become 'richest generation in history'

The new 20 pound bank note is displayed during a photo opportunity at the Tate Britain in London, Thursday, Feb. 20, 2020.
The new 20 pound bank note is displayed during a photo opportunity at the Tate Britain in London, Thursday, Feb. 20, 2020. Copyright Frank Augstein/Copyright 2020 The AP. All rights reserved
Copyright Frank Augstein/Copyright 2020 The AP. All rights reserved
By Indrabati Lahiri
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Millennials could stand to inherit trillions worth of property and property assets passed down by ancestors in the next 20 years.


Millennials could potentially become the wealthiest generation ever, according to estate agent Knight Frank's 2024 Wealth Report.

Defined broadly as those born from 1981 to 1996, millennials, also known as Generation Y, could possibly see a sizeable windfall in the next 20 years, due to property and other assets amassed by their parents and grandparents. This could clock in at about $90 trillion (€83.1 trillion) in the US alone.

"When the silent generation (born from 1925 to 1945), the baby boomers (1946 to 1964) and the oldest cohort of Generation X (1965 to 1979), die, £2.5 trillion (€2.9 trillion) in wealth tied up in their homes will be freed up," the report said, according to Yahoo Finance.

Liam Bailey, global head of research at Knight Frank, believes the influx of wealth to the younger generation is likely to go a long way in helping increase sustainable investments and conscious carbon footprint reduction.

"Millennials appear to have got the message when it comes to cutting consumption - 80% of male and 79% of female respondents say they are trying to shrink their carbon footprints," said Bailey, as reported by the Guardian.

Could an inheritance be enough to cushion ongoing economic shocks?

Although the inheritance is likely to add a pretty penny to millennial finances down the line, the current reality is a lot grimmer. Millennials have already been reeling under a number of shocks such as Brexit, the pandemic, the cost of living crisis, the Russia-Ukraine war and the resulting energy crisis. Most recently, the Israel-Hamas war and Red Sea attacks have also contributed to rising economic and geopolitical uncertainty.

Several of the factors above have also led to rising inflation, with UK inflation touching a 41-year high of 11.1% in October 2022. Although it has come down significantly since then, clocking in at 4% in January 2024, it is still twice the Bank of England's 2% target.

In turn, this has led to higher interest rates, as the Bank of England attempts to bring inflation back under control. Mortgage rates have risen too. The price of property has meant many millennials say they cannot afford to buy a house at present. 

The cost of living crisis has also contributed to several millennials saying they live month to month on their salaries, and cannot afford to contribute much to savings accounts or pension pots. This contrasts with the stereotypical image of the average millennial wasting their money on expensive coffees and other luxuries.

According to the Resolution Foundation's 2023 intergenerational audit report: "Millennials born in the late 1980s earned, on average, 8% less at age 30 than their counterparts from the Generation X cohort when they were the same age."

Millennials are more optimistic about income growth

However, it's not all doom and gloom, with Knight Frank's Next Generation Survey highlighting that 75% of male millennial high net worth individuals (HNWIs) expected their wealth to grow in the next 12 months.

When it came to women, 64% of female millennial HNWIs expected the same. This figure increased to 81% of women, when it came to the next generation, Gen Z, with half of these revealing that they expected "significant growth".

This is likely to be due to several investors feeling that central bank policies to contain inflation have been working quite well so far, with the disinflation process speeding up in the last few months. The prospect of interest rate cuts by several major central banks sometime this year have also contributed to the positive sentiment.

Despite several economic shocks, several equities, especially US ones, have also done well. Artificial intelligence companies have been some of the most successful ones, generating considerable interest, with companies such as Nvidia doing particularly well, as well as the "magnificent seven" US stocks overall.

Bailey said: "The improving interest rate outlook, the robust performance of the US economy and a sharp uptick in equity markets helped wealth creation globally. At the end of 2023, there were 4.2% more ultra high net worth individuals (UNHWIs) than a year earlier, with nearly 70 very wealthy investors minted every day, taking the global total to just over 626,619."

According to the Wealth Report, this trend is expected to continue, with the number of wealthy people across the world anticipated to grow about 28.1% by 2028. Malaysia is expected to see 35% growth, with Indonesia seeing 34%, India 50% and the Chinese mainland 47%. However, globally, this is still less than the 44% rise seen in the five years to 2023.

Millennials are also more optimistic about residential house prices rising further, which could potentially make their property and real estate investment values grow significantly once they inherit them from previous generations.

"The expanding cohort of wealthy individuals looks favourably on real estate. Almost a fifth (19%) of UHNWIs plan to invest in commercial real estate this year, while more than a fifth (22%) are planning to buy residential. Growth over the forecast period provides various opportunities for investors, particularly developers able to deliver property that suits the shifting tastes of the newly minted," said Bailey.

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