What young people want from the budget

When Emma Restall becomes a doctor in 2028 she will have spent seven years studying and will owe the Student Loans Company more than £100,000. She would like to move back to the south of England, but worries that will mean she cannot afford her own home. “I wouldn’t get a mortgage on a doctor’s salary to afford anywhere in that area on my own. You want to think there is a pay-off at the end of all the work, but not being able to get on the property ladder does play on my mind a lot,” Restall, 28, said.
Along with many in her generation, she is hoping that Rachel Reeves’s budget this month will usher in a new dawn for young people after years of stagnant wage growth, low homeownership, record rents and vast student debt.
Over the past two decades wages for 30 to 39-year-olds have declined in real terms. The average gross annual earnings of someone in this age bracket was just over £41,000 in 2004 (when adjusted to today’s money), but had fallen to £36,400 last year, according to the Office for National Statistics. Earnings for 18 to 21-year-olds and 22 to 29-year-olds have remained largely stagnant at around £30,000 and £20,000.
Restall qualified as a nurse this summer after three years of training and in September began a four-year medical degree at Newcastle University. She has worked all her adult life — at a supermarket in her early twenties, when operations to treat her epilepsy postponed plans for university, and as a healthcare assistant during her nursing degree.
She now does one shift — either seven and a half or 12 hours — in a hospital each week, on top of her 40 hours of study for her medical degree.
“I need to be really careful as tiredness is one of the main triggers for my epilepsy,” Restall said.
Age was one of the clearest dividing lines in the general election, with younger generations more likely to vote Labour. A poll of 35,000 voters by YouGov suggested that 41 per cent of 18 to 24-year-olds voted Labour, rising to 45 per cent among 25 to 29-year-olds and peaking at 46 per cent for voters in their thirties. Labour votes steadily declined with age, with just 20 per cent of over-70s voting Labour.
The younger generation who helped to get the government into power now want the favour returned. Here are some of the things they would like to see.
Restall will add to the 61,000 young people who have student debts of between £100,000 and £200,000, according to the Student Loans Company. Graduates have 40 years after leaving university to pay off their debt before it is written off — this was raised from 30 years in 2023. It means that Restall could be saddled with her nursing loan well into her fifties and her medical degree loan in her seventies.
Typical course fees in England and Wales are £9,250 a year, the highest undergraduate tuition fees in the developed world, according to the Organisation for Economic Co-operation and Development. Sir Keir Starmer, the prime minister, has abandoned the party’s pledge to abolish tuition fees in England, instead prioritising funding for the NHS. The government is reportedly considering raising fees to £10,500 amid pressure from universities.
Restall said: “My student debt is already pretty horrific. The whole student loan system is absolutely in need of reform.”
The Department for Education said: “The government is committed to reviewing the higher education funding system to deliver for our economy, for universities, and for students. We will be announcing further details in due course.”
A survey of 4,000 aspiring first-time buyers by the savings and investment app Moneybox found that 53 per cent vote Labour, 12 per cent Conservative and 11 per cent for Reform. The thousands who helped to get the government into power now want the favour returned.
The average property price in the UK has gone from £232,710 in July 2019 to £290,000 in July this year — up 25 per cent in five years, according to the latest Land Registry data.
Moneybox said that 80 per cent of the millennials questioned — those born between 1980 and the mid-1990s — wanted more support to get on the property ladder. Restall said: “I’d like to see affordable housing in more than just name. A lot of the homes marketed as affordable are beyond the reach of most first-time buyers I know.
“The more affordable properties are flats, but these can come with big leasehold issues that can make it impossible to sell again. I am also irritated that rent payments are not taken into account when proving that you can afford a mortgage, when the amount you are paying a landlord is more than your monthly mortgage payment would be.”
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Restall shares a flat with eight others in Newcastle. She began saving into a Help to Buy Isa in 2019 but has been transferring the funds into a Lifetime Isa for the past two years. Savers could use the Help to Buy Isa to buy homes worth up to £250,000 (£450,000 in London). “The house price restrictions on the Help to Buy Isa made it pretty much obsolete,” she said.
But the Lifetime Isa comes with its own problems. You can open the accounts between age 18 and 39 and save up to £4,000 a year until you are 50. The government adds a 25 per cent bonus of up to £1,000 a year, but there is a 25 per cent penalty if you withdraw the money before age 60 for anything other than buying a first home.
The Lifetime Isa house price limit is £450,000. Brian Byrnes from Moneybox said the cap was not a problem for most first-time buyers, but it would become one if it did not go up and house prices continued to rise.
“It takes our customers an average of three to five years to build up the deposit they need in a Lifetime Isa. So even if house prices in the area you are trying to buy in are below the £450,000 cap today, they might not be by the time you have saved enough.
“We know that if you help people with their primary financial goal of buying a house in their mid to late twenties, then they quite quickly move on to the next financial goal of saving into a pension or an emergency fund. They have faith that the financial system works for them,” Byrnes said.
By his own admission, before Finlay Doyle went to university he loved to party. But during his first year at Newcastle University studying geographic information science he bucked the trend of his peers and gave up drinking. “I felt that alcohol was holding me back from achieving my dreams. It was one of the best decisions I’ve ever made, but I lost out on socialising, because so much of it revolves around alcohol and I found the non-alcoholic alternatives quite dull,” Doyle, 20, said.
His decision sparked a complete overhaul of his life. In April he dropped out of university to found his non-alcoholic wine business, Miue, using £15,000 of his own money and £25,000 funding from Virgin StartUp, a not-for-profit that supports entrepreneurs. Miue is due to launch in December.
Doyle is worried that Labour’s tax raid on higher earners could make it harder to raise money for his business. He fears that the wealthy are looking to move abroad to escape a rumoured capital gains tax rise and other plans to tax non-doms, who are not legal UK residents.
Doyle said: “Raising capital is already a significant challenge for early-stage start-ups like mine. If taxes on high-net-worth investors increase, it becomes even harder to secure the funding we need, slowing down innovation and economic growth.”
Doyle would like to see greater incentives for investors to use enterprise investment schemes and seed enterprise investment schemes through more generous tax breaks and higher investment limits.
“This would encourage these investors to keep their capital in the UK and create a better climate for entrepreneurs like myself to raise funds, fuelling innovation and boosting the economy. Start-ups are where real innovation happens, so it’s really important to fund them effectively,” Doyle said.
Stamp duty will rise for first-time buyers next year. In September 2022 Rishi Sunak, the chancellor at the time, temporarily increased the threshold at which first-time buyers start paying stamp duty from £300,000 to £425,000. The threshold is due to revert to £300,000 in April and Labour said before the general election that it had no plans to extend the relief.
At the moment there is no stamp duty payable on the value of a property up to £425,000 and 5 per cent is charged on the portion from £425,001 to £625,000. If a property is worth more than £625,000 the buyer cannot get first-time buyer relief.
Peter Remon is saving to buy a home with his partner and would like to see the £425,000 stamp duty threshold made permanent to give first-time buyers a boost on to the housing ladder.
He said: “It feels like a lot of the political focus has been on policies for the older generation and younger people have been overlooked.”
Remon, 29, graduated from Sheffield Hallam University in 2017 and went straight into work at BlueSky Education, a public relations agency, where he is an account director. In July he and his partner moved out of London and back in with his parents in Milton Keynes to save for a house, which they hope to buy in the next two years.
“I did the maths and the money I will save living with my parents in a year would have taken me seven years to save in London. There are, of course, benefits of moving back home but I hoped I would never have to do it at this stage in life.
“The stamp duty, legal fees and moving costs are already extortionate and we debated whether it was worth us buying a much cheaper house now and racing to buy before the stamp duty threshold goes down. But then we risk buying a place we don’t really love because we have rushed it. Making the £425,000 threshold permanent would be a huge help to us,” Remon said.
He would also like to see more done to tackle soaring rents. Before they moved back to Milton Keynes, the couple were paying £1,850 a month for a one-bedroom flat in London. “It was common to be competing with 50 others interested in the same rental property with bidding wars over the asking price. It’s not sustainable for young people.”
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Eligible parents with children as young as nine months now get 15 hours of free childcare a week during school term times in England, under reforms brought in by the previous government. This will rise to 30 hours from September 2025.
The Labour government has committed to the planned extension of free childcare. But Joeli Brearley from the campaign group Pregnant Then Screwed said younger generations wanted to see more family-friendly policies in this month’s budget.
“With eye-watering childcare costs, measly rates of statutory maternity and paternity pay, and housing costs out of control, those who want to start a family are further away from the starting line than ever before,” said Brearley.
An average full-time nursery place (50 hours a week, 48 weeks a year) for a child under two costs £14,100 a year, according to the children’s charity Coram.
Brearley said: “Deaths in the UK outstripping births is no surprise to us. With financial instability an ongoing concern — is it any wonder that people of childbearing age are holding back from taking the plunge?”