- Gen Z workers are earning more at age 24 than any previous generation on record.
- Housing costs, inflation and job insecurity continue to weigh heavily on young adults.
- Around 40 per cent of Gen Z globally say they are living pay cheque to pay cheque.
For years, millennials were held up as the generation that got a raw deal from the economy. Now, new research suggests Generation Z may be faring better on one important measure: wages.
A report from the Resolution Foundation found that Gen Z workers in the UK are earning more than millennials did at the same age, helped by a stronger labour market and substantial increases in the National Living Wage. Yet economists caution that higher pay does not automatically mean greater prosperity, as housing costs, inflation and job insecurity continue to shape the financial reality facing young adults.
The findings add a fresh dimension to the debate around Gen Z wages and the UK cost of living crisis. While incomes have improved, many younger workers still struggle to build savings, buy homes or feel financially secure.
According to the Resolution Foundation, real weekly earnings for people born in the late 1990s were 12 per cent higher at age 24 than for those born in the late 1980s. Those born in the early 2000s are now earning more at the same age than any generation recorded since the 1950s.
The think tank attributes much of the improvement to a tighter post-pandemic labour market and a series of minimum wage increases introduced over the past decade.
The strongest gains have been among lower-paid workers. The bottom tenth of earners saw real pay rise by 36 per cent between 2012 and 2025, according to the report. Workers aged between 22 and 29 on median earnings recorded a 15 per cent increase in hourly pay over the same period, compared with 4 per cent for workers in their 30s.
The contrast with millennials is significant. Many entered the workforce during or shortly after the 2008 financial crisis, a period marked by weak wage growth and economic stagnation. As a result, they became the first modern generation not to enjoy higher living standards than their predecessors.
Charlie McCurdy, senior economist at the Resolution Foundation, reportedly said Gen Z had benefited from a "mini pay rebound" after years of concern that generational progress had stalled.
The cost of everything has changed
Yet wages tell only part of the story.
While millennials faced weak earnings growth, Gen Z entered adulthood during one of the sharpest inflationary periods in decades. UK inflation rose above 11 per cent in late 2022, pushing up the cost of food, rent, transport and energy at the same time.
The result is a generation earning more on paper but often feeling little better off in practice.
Housing remains one of the biggest obstacles. Barclays research found confidence in homeownership among 18 to 34-year-olds improved during 2025, but affordability remains a major barrier. Nearly two-thirds of prospective young buyers cited high property prices as a key challenge.
Separate data from tenant referencing service Canopy found some renters in Britain are spending as much as 40 per cent of their monthly income on rent alone.
Property costs are also reshaping financial prospects. Research from Hamptons suggests Gen Z homeowners who bought in 2020 could become the first generation to see house prices fall in real terms during their first five years of ownership.
Over the first half of a typical 30-year mortgage, the average Gen Z buyer is expected to pay around £191,000, more than double the inflation-adjusted amount paid by baby boomers at the same stage.
Better pay, bigger worries
Financial pressure remains evident across several studies.
Deloitte's 2026 Gen Z and Millennial Survey found around 40 per cent of both generations are living pay cheque to pay cheque. Nearly half of Gen Z respondents said they had postponed major life decisions, including buying a home, starting a family or relocating, because of their finances.
The cost of living emerged as the top concern for 44 per cent of UK Gen Z respondents and 52 per cent of millennials surveyed.
Meanwhile, not everyone is benefiting from the wage rebound. The Resolution Foundation warned that the gains apply only to young people who have managed to enter employment.
The number of 16 to 24-year-olds not in employment, education or training has climbed to around one million. Former Labour minister Alan Milburn reportedly warned that figure could rise to 1.25 million by the early 2030s if action is not taken.
Competition for graduate jobs is also intense. According to the Institute of Student Employers, around 1.2 million graduate applications were submitted for just 17,000 available graduate roles.
Looking ahead, the outlook remains uncertain. The Resolution Foundation cautioned that wage growth could come under pressure if inflation remains elevated and economic growth weakens.
At the same time, long-term forecasts remain relatively optimistic. A Bank of America report published in 2025 projected that Gen Z could become the world's wealthiest generation by 2035, supported by rising earnings and a large transfer of wealth from older generations.
For now, however, the picture is mixed. Gen Z may be earning more than millennials did at the same age, but for many young people the gap between earning well and feeling financially secure remains wider than ever.
