People born in the 1960s and 1970s are "worse off" than the post-war baby boomer generation, according to an Institute for Fiscal Studies report. But what makes the two generations so different?

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The Institute for Fiscal Studies (IFS) says people born in the two decades from 1960 will, on average, have no higher income or savings, will be less likely to own a home and will have smaller private pensions than their post-war predecessors.

The only respect in which they will be better off is that they are more likely to inherit.

Of those born in the early 1940s, only 28 per cent expected to receive an inheritance, whereas the number leaps to 70 per cent for those born in the 1970s.

Karen Rowlingston, professor of social policy and director of the Centtre on Household Assets and Savings Management, University of Birmingham, told Channel 4 News: "The baby boomers have a less positive attitude to inheritance. This is not to say they weren't thinking about it, but they were mainly thinking about their own needs.

"They were the consumer generation and they thought about themselves, but as they got older they started thinking about putting money aside for their children.

"People born in the 1960s and 1970s are less wealthy than their predecessors so are more likely to think about their inheritance."

Young people in the 1960s (G)

A Joseph Rowntree Foundation survey in 2005 found that inheritance generally plays an important part in many people's lives but is not necessarily expected.

Most older people are willing to use their assets for themselves, rationally using some of their lifetime assets to meet needs in later life.

However, the survey found that younger people, especially those whose parents are currently owner-occupiers, have the greatest expectations of receiving an inheritance.

The 1980s

According to the report, the incomes of working-age adults born in the 1960s and 1970s were no higher in real terms than those of their predecessors when they were the same age a decade previously.

While the sixties and seventies generation did enjoy higher incomes when younger, they also spent more lavishly, with the result that they no more savings than their predecessors.

Beverley Searle, senior lecturer in human geography at the University of Dundee, told Channel 4 News: "People born in the 1940s left school and entered work at a time when jobs were for life and credit was much more strictly rationed.

"Incomes became the benchmark for prices and what was affordable."

Read more: generation game - who's better off?
On the stock exchange in the 1980s (G)

Ms Searle added: "During the 1980s the financial markets were opened up, allowing more organisations to provide access to loans and other credit.

"There was a greater expectation that people moved jobs in order to gain experience and progress in their career. But with flexibility comes uncertainty.

"As credit becomes easier to access, this allows room for prices to increase, even if wages are not keeping up.

"As prices rise above wages, and employment income becomes less certain, people look to getting more credit to cover the cost. It's a vicious circle.

The generation of the 1960s and 1970s also took longer to get on the housing ladder, with their home-ownership rate having fallen back to around two-thirds, compared to a peak of four-fifths among those born in the 1940s and 1950s.

While they are more likely to inherit than their predecessors, the benefits are unevenly spread, with those who are already the wealthiest set to receive the most.

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