Gen Z entered this Budget facing a daunting mix of challenges: stubbornly high rents, a difficult housing market, rising living costs and growing uncertainty about the future of work.
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Z → enter → work
Many young people had hoped Chancellor John Healey’s landmark Budget would deliver measures to boost home ownership, create opportunities and ease financial pressures on a generation that often feels locked out of traditional milestones.
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that → hop → milestones
While Wednesday's announcement included policies aimed at increasing housebuilding and supporting economic growth, some measures will leave younger Britons wondering whether enough has been done to help them get ahead.
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them → include → Britons
From student loans and employment to housing and savings, here's what the Budget means for Gen Z.
Student loans
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Budget → mean → Z.
The income at which graduates must start making repayments is set to be frozen for three years, which means many graduates will start making payments sooner and be paying more each month.
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graduates → start → more
Worse still, the interest rate on Plan 2 loans is higher than other plans and countless graduates have seen their debt rise even as they make repayments.
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they → see → repayments
The government did commit to making the system fairer, but it seems that nothing was accomplished in John Healey’s Budget.
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nothing → commit → Budget
A reverse of Rachel Reeves’ freeze on the Plan 2 student loan threshold was at the top of Mr Lewis’ list when he met with Chancellor John Healey ahead of the Budget.
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he → meet → Budget
He told the BBC: “Many 18-year-olds were asked to sign contracts with the government about their student loans and the government is now retrospectively making those contractual terms worse.”
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terms → tell → loans
He called the freeze a “moral breach” and a “breach of natural justice.”
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He → call → justice
This has only been exacerbated by the NEET crisis which means hundreds of thousands of graduates without a job have accumulated interest without ever securing a job out of university.
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thousands → exacerbate → university
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Not to mention that repayments for the student loan are taken from a graduate’s gross salary, rather than their net income.
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repayments → read → income
The UK government continues to operate a tiered minimum wage system that pays younger workers aged between 18 and 20 less than adults aged 21 and over.
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that → continue → 21
While Labour pledged to get rid of this system, the Budget confirmed that it is still very much in place.
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it → pledge → place
Those aged between 18-20 years old will see a rise of 3.9% in their pay - the same increase as those aged 21 and above - but there will still be a disparity in pay.
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Those → age → pay
And while an increase in minimum wage seems like a good thing, it risks young people paying off their student loan sooner than they anticipated and at a higher rate.
It also creates fiscal drag - which occurs when rising wages and inflation pull people into higher tax brackets.
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wages → seem → brackets
Given the UK personal allowance will remain frozen through April 2031, young workers will see a larger chunk of their income eaten by tax without gaining any purchasing power.
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chunk → give → power
Employment
But the Budget risks pricing young people out of work.
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Budget → risk → work
Squeezing businesses is likely to significantly reduce the number of entry-level jobs in the market - which will provide no comfort to a generation suffering from a NEET crisis.
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which → squeeze → crisis
Lucy Mangan, Partner and Head of Tax Services at Menzies LLP, warned: ““Leaving the National Insurance threshold at £5,000 and frozen until 2031 means every rise in the National Living Wage pushes up employer contributions on each salary, and with the Employment Rights Act set to restrict the flexible contracts that labour-intensive firms depend on, many employers won’t gamble on entry-level roles at all.
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employers → warn → roles
No other solutions were presented by Mr Healey to remedy the NEET crisis, but there is a report underway by Alan Milburn, former minister of state for health.
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solutions → present → health
Mr Milburn will make recommendations to the government on the issue later this year.
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Milburn → make → issue
Some members of Gen Z expressed optimism that minimum wage increases will encourage people to work and to stay employed.
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increases → express → people
Homes
John Healey revealed his plan to get young people on the housing ladder - a £4.7 billion scheme called the Your First Home scheme.
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Healey → reveal → ladder
People will be able to buy a new-build home with a deposit of 2.5% and will be given a loan worth 20% of their property’s value .
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People → buy → value
According to the treasury, the scheme could support the delivery of around 20,000 new homes - a measure which could be important in London give the shortage of affordable housing in the capital.
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which → accord → capital
The scheme has been launched to help those who don’t have “the bank of mum and dad” at their disposal.
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who → launch → disposal
This is in addition to the “First Time Buyer ISA”, which will replace the existing Lifetime ISA in 2029, providing an account for savers to build up a deposit.
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savers → replace → deposit
The government will then top up the account with a 25% bonus for contributions of up to £4,000 a year.
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government → top → 4,000
However, a hit to landlords could have ripple effects for young renters across the UK.
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hit → have → UK
John Healey announced an additional 2 percentage point increase in property income tax rates, which according to the OBR, could lead to a “steady rise” in rent prices.
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which → announce → prices
For young people yet to make it on the housing ladder, this could prove a problem and could exacerbate the housing crisis - particularly in London.
Nouran Moustafa, financial advisor and founder at Roxton Wealth, said: “From April 2027, property income tax rates will rise to 24%, 44% and 49%.
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rates → make → %
Some landlords may absorb those costs, but others could reconsider investing or selling their properties.
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others → absorb → properties
“London already has an affordability problem.
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London → have → problem
If rental supply tightens further, young Londoners could face even more competition for somewhere to live.”
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Londoners → tighten → competition
He added that a 2.5% as announced in the Your First Home Scheme will do little to “suddenly make London affordable” and that increased purchasing power could eventually be reflected in higher new-build prices.
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power → add → prices
It is also worth noting that the Your First Home scheme is an equity loan - meaning it is only interest free for the first five years.
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it → note → years
Sean Boyle, a 21-year-old Londoner, told the Standard that he would’ve liked to see “measures that make it easier for young people to save money and get on the property ladder.”
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people → tell → ladder
He told the Standard: “I work full-time and try to put money aside every month, but it can feel like no matter how careful you are, the cost of living makes it difficult to get ahead.
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it → tell → living
Even small changes that leave people with more money in their pockets each month would make a real difference.”
Young Entrepreneurs Allowance
John Healey has also tried to encourage young people to start their own businesses, introducing a scheme dubbed the “Young Entrepreneurs Allowance”.
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Healey → leave → scheme
…and 17 more, not listed.
The Aporia
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