It’s possible that I was overly simplistic in this, but I concluded that people got wealthier as they got older because they saved. The key element is the relative proportion of the rich gits increases with age.
The ONS itself seems to attribute some of the changes to the wealth life-cycle on page 6

A number of reasons might help
to explain why household heads living in the wealthiest 10% of households tend to be older than those living in households in the lowest half of the distribution. For instance, income is expected to
increase as an individual becomes older and more experienced. At a younger age it will be more necessary for individuals to borrow money. Later in life the prospect of higher earnings will enable the paying off of liabilities and the greater opportunity to accumulate wealth.

I never consciously regarded paying down my mortgage as saving, but I guess it was, in a roundabout way.

The 1%-ers had actually insinuated into my mind that 1% of the population owned 99% of the wealth. I am chuffed to discover the spread is nowhere near as extreme. I remember feeling as they did in the BH bar, that it wasn’t fair that so few of the people I knew were rich, and it seeemd other people had all the money, but that was partly because we were all young

@Monevator I was genuinely surprised at the distribution of wealth, because I expected the power of old money to be much larger than it seems it is. Okay 1%/99% may have been a caricature, but perhaps 10%/90%.

I know debt reduction is theoretically saving, but it sure doesn’t feel like it at the time

@BeatTheSeasons It does include house prices, but you overestimate the effect of that. My current semi-detached house is roughly worth a shade less than 1.5 times what I paid for my two-up-two-down in ’89 in real terms, so I am not sure that house price inflation is all there is to it.

I think your situation will turn out to be better than it feels now, but I believe each generation feels different kinds of pain. I graduated in ’82 into the teeth of Thatcher’s first recession. I left London in the late 1980s because house prices were running away from me. Sound familiar? I was then daft enough to to buy a house at a 4.5x income multiple and see half of the value fall away. I’ve paid 14% interest rates and thought 6 to 8% were normal. Some of the high house price valuations now are because people can pay them due to low interest rates.

You forget some things which are vastly better now

- lower taxes now. I was paying 30% income tax. In the crummy kitchen porter jobs I did at the start I was earning considerably less than the modern National Minimum Wage – I earner £1.54 p.h which is £4.84 now, I was over 20. I even paid tax and NI on that, though it was a summer vacation job.

- Fair point regarding free university, but when I went to university only 11% of school leavers became undergraduates, this was screened by A level results. More than half the university applicants in my class at school failed to get in.

- Other aspects that are better are health care. I recall two weeks drifting in and out of consciousness with measles as a child which doesn’t happen now. Respiratory ailments were much more commonplace among children too.

As for wealth creation, I didn’t accumulate wealth until I was about 45 – up to then my net worth was negative. There’s hope – and as for early retirement, things like MMM and early retirement extreme were unheard of. Take a look at Retirement Investment Today for someone UK based who is both younger than I am and who makes me look like a slacker for early retirement.

In some way the opportunities might be better for those coming of age now – those of my acquaintance are far less materialistic that I was and seem to have a mastery over spending less that I missed for decades.

Starting a company is also much easier – the first one I was involved with in the mid 1980s we struggled to even get the word out, no Internet, and hideously expensive print advertising. The opportunities for working abroad are far easier, too

So it feels rotten now, but I think if you stay the course it will improve with time, as the ONS indicate. All the way up to my late 30s I thought I would never get over being beaten up by the volatility of the UK housing market. I didn’t appreciate the value of keeping on putting one foot in front of the other. That first 25-year mortgage would have been due in February 2014. I lost more on that first house than it would cost to go to university for three years now, but my mortgage career was still shortened by 5 years despite the sucker punch.

Keep the faith. Building wealth is the matter of thousands of small steps.

> Whereas anyone reaching adulthood since the global financial crisis is going to see their opportunities for wealth creation a bit more limited.

Substitute Thatcher recession and (though I didn’t know the terminology) Lawson housing boom and that could have been me talking, in the Broadcasting House bar. Reality turned out better than that…

@BeatTheSeasons I used the Bank of England inflation calulator

Technology is a terrible comparator, because not only does your modern PVR work a lot better in terms of sound and image clarity, it’s also a lot cheaper in absolute and real terms That’s the result of accumulated experience and human ingenuity building upon the work that’s gone before. Your iPad’s a lot better than the Atari 800XL I wrote my MSc thesis on and I probably paid more in nominal and much more in real terms for mine.

I’d venture the best comparisons are things we all needed and still need, clothing, food and fuel (accomodation is the variable you are trying to qualify so I’ll leave it out for the moment). There’s a lot of grousing about energy prices these days, and yet I remember them being much higher as a proportion of my pay when I started work. This UK Parliament research paper shows we have enjoyed a long suckout in energy prices in real terms. However, in real terms I use a lot less energy now, because British houses of the 1980s were draughty where they are a lot better now. Food is also cheaper – look at the chart in this Defra publication – food is cheaper now than when I graduated, and this squares with my recollection of how much I spent on food. In addition there is a quality plus, not as dramatic as your VCR but notable nevertheless. British cooking wasn’t anything to write home about then, a tendency towards overcooked veg and meat, compared to now, with one exception, I’d say fast food is more disgusting though in a vaguely moreish way now than it was then, but I’m probably become more discriminating

We spend less of our incomes on food, fuel and clothing and probably the same or a little more on accommodation than in the late 1980s. I’m happy with the results of the calculator for my experience of life in Britain – I was surprised because of all the stories you hear that the Government fixes this but it isn’t wildly out.

As suporting evidence the two-up-two down a friend bought a couple of years ago was about the same price I paid in 1989 once I scaled the purchase price by the BoE calculator. Okay, I overpaid, so it supports a little bit your tenet that prices have gone up – average now is overpaying then, but it isn’t anything like double!

What you talk about happened earlier. My Dad bought his house in 1960 for £500, which that BoE calculator tells me is worth about £10,000 now. However, he had to put on a suit and be interviewed about his work prospects, whether he was going to have more kids and so on by the building society manager. Far fewer people in those days owned houses, because it was far harder to raise capital. I had a rant about interest only mortgages and the damage they have done to the UK housing market. One of the reasons prices are higher than they used to be in the 1960s is that lenders recently lent to any damn fool, and as houses are sold by auction having more fools bids the prices up, to the detriment of their own interests and that of other market participants. Most of that happened before the mid 1980s, probably as a result of the 1970s stagflation and the 26% inflation of 1979.

We need higher interest rates to bring down prices. This will happen, sometime, but it is a lottery as to whether you hit the housing market at the right time. I didn’t, people in 2007 didn’t. It feels dreadful, because you see other people a few years before you bought okay, why can’t you? People in the office warned me about the Lawson boom and the removal of MIRAS forcing a peak, but I wanted to buy a house so badly and I wasn’t experienced in the way of the markets so I bought anyway – they couldn’t put an old head on young shoulders It was the single biggest personal finance mistake of my life – it dwarfed what I lost in the dotcom bust.

But viewed in terms of a 20-year house owning career it was a speed bump – I still discharged my mortgage about seven years early. The key is the small steps of spending less than you earn, each and every year. That adds up over 20 years, and once you shake the drag of debt the adding up gathers speed in a rush towards the end, particularly if you can save tax-free (in AVCs in my case, in a SIPP or equivalent in yours).

There’s hope, but it makes a faint sound carried on the drip-drip-drip of accumulation over many years. I didn’t realise that until I was a grizzled old git coming up to retirement. Perhaps it is inherent in the human condition – we’re just not that well set to perceive changes that happen over decades rather than months.