June 25, 2026
Gen Z Are Out-Earning Millennials – But the Pay Rebound Won’t Last
New Resolution Foundation analysis shows Gen Z workers out-earning their millennial predecessors. But a looming wage squeeze and a million young people out of work make this a precarious story, and a clear call to action for employers.
Since the 2008 financial crash, the overarching assumption has been that each younger generation has ended up less financially well off than the last. New analysis from the Resolution Foundation suggests the picture is more complex, at least in the UK.
The data, trailed this week ahead of the full report, shows that Gen Z have so far seen a small uplift in their pay packets compared with their millennial predecessors, though wage falls are on the horizon for later this year.
For those born in the late 1990s, real weekly pay at age 24 was 12% higher than for those born in the late 1980s. The uplift continues for those born in the early 2000s, who are earning more at the same age than any cohort since the 1950s.
But this rebound is not set to last, the Foundation cautions, for two reasons.
First, with the war in the Middle East raising prices and weakening UK economic growth, a decline in real wage growth is expected. In the private sector, it has already been falling since October 2025.
Second, the number of 16 to 24-year-olds not in education, employment, or training (NEET) has now reached one million. This means a significant proportion of the younger Gen Z cohort are struggling to earn a wage at all, let alone a better one than their predecessors. The Foundation is urging the government to tackle Britain’s NEET crisis as a priority.
An Early Repair: What the Gen Z Pay Data Really Shows
Gethin Nadin, Chair of the Policy Liaison Group for Workplace Wellbeing, reads the findings as “a partial recovery in early-career outcomes following a prolonged period of stagnation”.
He cautions against interpreting the data as “a restoration of generational progress”. It should be understood, instead, as an “early repair”.
Like the Foundation, he points to the NEET crisis as a key threat to that repair. “The headline masks a structural divide,” he says. “A significant share of the cohort, one million 16 to 24-year-olds, are excluded from the labour market entirely. Delayed labour market entry like this reduces lifetime earnings potential, weakens the future skills pipeline, and increases long-term recruitment and training pressures for employers.”
And for those Gen Z workers who are benefiting from higher wages, the wider context is still driving financial concern.
Ryan Briggs, Financial Wellbeing Lead at FinWELL Training, points out that better pay has not made life simpler. “They’re also facing greater complexity and uncertainty,” he says. “Housing costs, student debt, rising living costs, pension decisions, workplace benefits, and constant exposure to financial content on social media can all contribute to feelings of financial stress, even when earnings are relatively strong.”
Employers, then, have a significant role to play in the financial security of young people, and that responsibility extends beyond raising wages in line with inflation.
Why Pay Rises Alone Won’t Fix Gen Z Financial Wellbeing
This is where organisations often fall short, focusing on pay alone rather than the wider financial picture.
“One of the biggest mistakes employers make is assuming financial wellbeing starts and ends with pay,” says Briggs. “In reality, younger workers often tell us they want practical guidance, trusted information, and the confidence to make good financial decisions, rather than another employee benefit they don’t fully understand or engage with.”
Nadin builds on this. He suggests the data may also obscure a deeper fragility in the employment relationship, noting that recent pay gains owe much to external factors such as minimum wage increases rather than to genuine improvements in job quality. On its own, he argues, higher starting pay is “unlikely to sustain engagement or retention” without parallel investment in skills and career pathways.
What Employers Can Do to Support Young Workers’ Financial Wellbeing
Briggs urges employers to be proactive, and not to wait until financial strain begins to affect wellbeing, performance, and retention. Getting ahead of the problem means strengthening people’s financial resilience, their confidence in managing money, and their day-to-day financial habits.
The key, he says, is to start early. “We’re seeing an impact from employers offering dedicated money skills training for apprentices, young adults, and early careers within the first year of joining the company, or in some instances as part of their onboarding experience.”
This does more than signal genuine care. It helps younger workers build healthier money habits from the start of their careers, reducing the likelihood of future financial strain.
The benefits are not confined to employees, Briggs adds. “Our research has shown that this type of support can potentially reduce time taken off work, increase productivity and performance at work, and also increase talent attraction and retention.”
The Shrinking Early-Careers Ladder: A CX and Retention Risk
Adding further complexity is the growing demand for more senior skills within a shrinking early-careers job market. As AI absorbs routine work, the traditional route for young people to build skills and experience is narrowing.
“A reduction in accessible entry points risks limiting the ability of young workers to build capability, with long-term implications for organisational productivity and workforce composition,” Nadin warns.
Customer-centric organisations, with their typically low-investment, high-turnover early-career roles, will feel this shift most acutely if they fail to adapt. “This model undermines future capability,” says Nadin.
“Organisations that instead align fair pay with progression and skill-building pathways will be better positioned to convert early pay gains into sustained workforce participation and performance.”
For customer-centric organisations in particular, the stakes are immediate. Retail, hospitality, and contact-centre sectors run on young, early-career, and often frontline staff – the very people this data describes. A generation that is either financially anxious or locked out of work altogether is therefore a direct customer-experience and retention issue, not an abstract economics story.
