Reform’s IPOD Generation Unlikely to Become Homeowners

The world is governed by the baby boomers.  The only thing that is surprising is the way in which economic trends have, so far, favoured them.  The baby boom generation started in 1947, when the babies were born who had been fathered by the returning soldiers after the end of the Second World, War.  The boom came to an end at a less definite date in the 1960s, which was influenced in part by the introduction of the contraception pill.  The youngest boom babies are now around forty years old.  There is a new generation aged between twenty and forty, which is treading on the heels of the baby boomers.

A London think-tank, Reform, has just published a study on the impact of the social demands of the baby boom generation on the younger generation, defined as the generation which is now aged between 18 and 34.  The consultant on this study is Nick Bosanquet, the Professor of Health Policy at Imperial College, London, which is one of the great scientific universities of the world.

The report argues that this generation should be called the IPOD generation, because it is “insecure, pressurised, over-taxed and debt ridden”.  These economic pressures are stifling the IPOD generation’s commitment to innovation.

In Britain, unlike some other leading industrial competitors, taxes have risen to the point at which the average taxpayer is paying 50 per cent of earnings in tax.  Reform argues that this level of taxation is the response to the pension and health care costs of the baby boom generation.  It is certainly true that the baby boomers enjoyed benefits which are not available to the succeeding generation.  Generous grants for university education have been replaced by loans;  relatively cheap first time housing has disappeared in the booming house market.

The British IPOD on leaving university is likely to leave a debt of around £20,000;  a typical middle class apartment is likely to cost £200,000, or £350,000 in London.  Starting salaries are not all that high, and life time employment has more or less disappeared outside the public sector.  It is obvious that a trainee on £20,000 a year will have to struggle to pay off the student debt and cannot afford to take a mortgage debt of ten times the initial salary.  In Britain we now have a generation many of whom can only expect to have a house of their own if they inherit a house from their parents.  There is a whole class of thirty year olds who are still living in their parents’ homes.

There are exceptions to this.  Salaries in financial services are much higher, though these salaries set the costs for professional workers outside the financial services.  There are also successful young entrepreneurs, many of them in Information Technology.

I can compare this situation with my own experience as an ex-student in the 1950s.  I came down from University with zero debt, having enjoyed scholarships which no longer exist, with the state paying my College fees.  My trainee salary started at £630, the equivalent of a current salary of £19,000 in constant purchasing power, but worth much more in terms of house prices.  I bought my first house in 1952 for £4,000, with a mortgage provided by the developer on a 4 ½ per cent basis.  The house therefore cost a little over six times my starting salary.  The mortgage interest was less than a third of my earnings.  I could well afford to buy a house in the centre of London which would now be worth close to £1 million.  I expected life to go on getting better and for my generation and the one after us, it did.  It has got sharply worse for the young of the new millennium.

To some extent these burdens on the young are world wide.  Certainly the disappearance of millions of attractive and secure management jobs, made redundant by modern I.T., is a global issue.  So is the unaffordibility of housing.  So is the failure of many baby boomers to save adequately for their own retirement.  There are many thirty year olds who have benefited from this new world.  There are also many IPODs who will never reach the standard of comfort of their parents’ lives.

William Rees-Mogg
for Markets and Money

William Rees-Mogg
Leading political editor William Rees-Mogg is former editor-in-chief for The Times and a member of the House of Lords. He has been credited with accurately forecasting glasnost and the fall of the Berlin Wall – as well as the 1987 crash. His political commentary appears in The Times every Monday. His financial insights can only be found in the Fleet Street Letter, the UK's longest-running investment newsletter.

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5 Comments on "Reform’s IPOD Generation Unlikely to Become Homeowners"

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Allan Hart

Turning 34 on the weekend, living overseas 7 years (and without a house), my response to the cost of housing in Australia is – what happens when the music stops? When all the boomers shuffle off or downsize etc, what happens to the price of houses, looking ahead say 10-15 years?

Philip Barton
Personally I find this is a very worrying article. I was born in 1946 and have always considered myself a baby-boomer. In fact, to be precise, I have always considered those born after 1946 to be not real baby-boomers, but mere also-rans who were, fortunately for them, lumped into the same category for easy classification. Now this Rees-Mogg fellow is not only causing my hyphens to run almost out of control, but he appears to be suggesting that I, the original, born in February of 1946, is in some way not the genuine article and that only those born in… Read more »

I think you missed the point Philip…?

Anyway, as a 37yo living in this IPOD reality I can say that none of the values of my parents means anything to me.
I have no need for a mortgage or debt.
I can also clearly see that in 10-15yrs time things will again change rather dramatically a my parents age and change their needs….
How it will end up? I dont know and dont care, but, I will remain fluid and take advantage of opportunities as they arise.

I coined a phrase “The stolen Future Generation” which means a similar thing to IPOD…


They don’t need to downsize…and they aren’t going to die too soon.

Even though their generation may have assisted in raising the prices of housing, I don’t think they will have any impact on its longevity.

Although I’d love to think that house prices will crash down to half of their current, if they did I doubt it would be related to anything new the baby boomers do.


As a fully qualified boomer, I continue to be completely ashamed of my peers. Most boomers were brought up to believe in selfishness. Little wonder that following generations find very little to venerate in their immediate ancestors. Boomers will continue in their selfishness while political parties pander to their every whim, until economic collapse ensues. Perhaps they will die off before that, but that would be deflationary anyway. No modern economic theory can cope with ‘negative growth’.

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