The generations that shape our world - baby boomers, Gen X, millennials, and Gen Z - are distinct in their outlooks on life, wealth, and success. These differences affect everything from work to family dynamics, particularly as the "Bank of Mum and Dad" now defines the fortunes of many millennials and Gen Z.
A report by the global real estate consultancy Knight Frank that millennials would be the wealthiest generation in history sparked plenty of excitement. But the reality is that this prediction mainly applies to ultra-high-net-worth individuals. For most millennials, the dream of wealth hasn't materialized, and for many, their standard of living depends almost entirely on the "Bank of Mum and Dad".
Inheriting wealth, however, is far from simple. Heirs often face not just financial responsibilities, but also the emotional legacies tied to the family business. These dynamics can be complex, even infantilising, as heirs grapple with their roles as the preservers of family wealth while simultaneously seeking to establish their own identities.
Baby boomers, born during the post-WWII economic expansion, benefited from unprecedented opportunities to accumulate wealth. In the USA, boomers own 68 % of private wealth; one in five UK boomers is a millionaire. This generation is redefining what aging looks like. Today, retirement is no longer about golf courses and grandchildren. Many boomers, particularly women, are active entrepreneurs, and they have embraced social media as their playground.
Interestingly, boomers have adopted the digital habits of their millennial children. Platforms like Facebook are dominated by older users, and this tech-savviness has been a revelation. Their expectations of technology and communication are now in line with those of younger generations; they demand immediacy and constant connectivity.
Sandwiched between boomers and millennials, Gen X is often overlooked. Yet this generation not only accumulated significant wealth, they were also pioneers when it came to embracing personal, mobile entertainment electronics. These "Sony Walkman kids" were the first to experience the privatization of technology, setting them apart from boomers, who grew up with communal devices like record players.
Gen Xers, now entering their prime earning years, face a dual financial burden. They are responsible for raising their children (a 30-year financial commitment, with the most expensive years often coming after age 18), while also caring for elderly parents. Also known as the "squeezed generation", they are shaping how families manage these dual responsibilities in an aging society.
Millennials are undoubtedly the most highly educated generation in history. Across the countries of the OECD, 50 % of millennials hold a university degree, and 32 % have pursued postgraduate education. However, they entered adulthood at exactly the wrong time, during the global financial crisis, when wages stalled while wealth continued to concentrate in the hands of older generations.
"Nepo baby" evokes the image of inheriting opportunity or wealth rather than earning it.
What did become cheap for millennials was technology and travel. This is the "smartphone generation" for whom travel is the ultimate status symbol, which is far more affordable than the housing or education they often struggle to finance. With housing prices soaring, many millennials rely heavily on the "Bank of Mum and Dad" to bridge the gap. This reliance on parental wealth, rather than personal earnings, has created a deep sense of frustration for a generation raised on the promise of meritocracy.
Moreover, millennials have a complicated relationship with capitalism. Many view it sceptically, as an economic system that has failed them. This negativity extends to their views on wealth accumulation, which now carries a stigma reflected in terms like "Nepo baby", highlighting the negative connotations of inheriting opportunities or wealth, rather than earning it.
Unlike millennials, Gen Z are the first truly global generation. Their worldview has been shaped by global crises like climate change and the COVID-19 pandemic. Born into a world of instant access to information, Gen Z are distrustful of promises and institutions. Their cynicism stems from living in a culture of constant comparison, which is a byproduct of growing up with smartphones and social media. They have been exposed to the world's information from an early age, and nothing impresses them because they believe they can always find the answers themselves. They also have the shortest average attention span of any generation: 8 seconds.
This generation's relationship with mental health is also telling. Overloaded with information from a young age, Gen Z is more focused on managing their mental wellbeing, often curbing social media use and prioritizing balance over hustle. They have also grown up in an economic environment shaped by the deepest recession since WWII, making them question the traditional narratives of work, education, and retirement.
One of the most profound ways to understand generational differences is through parenting styles. Early baby boomers grew up in homes where children were seen and not heard. Today, many parents - especially millennials - are more likely to be scared of their kids than the other way around. This shift has created two distinct parenting approaches. Millennials were raised on the doctrine of "do what makes you happy", and this has permeated their attitudes towards work and life.
Gen Z, on the other hand, grew up with a voice at the family table. Constantly asked, "What do you think?" they have become accustomed to having their opinions valued, even in matters like family investments. This assertiveness, coupled with helicopter parenting and the ability of parents to monitor their children via technology, has created a generation that is empowered but also highly cynical.
As we navigate these generational shifts, it's clear that each cohort has been shaped by different economic, cultural, and technological forces. From the privileged baby boomers to the disillusioned millennials and the cynical realists of Gen Z, every generation faces unique challenges and opportunities. But one common thread remains: family wealth and the "Bank of Mum and Dad" continue to play a pivotal role in shaping financial futures across generations.
Dr Eliza Filby studies society through the prism of age and generations - from baby boomers to Generation Alpha - examining how the traditional lifecycle is being reordered in the 21st century. She is the author of “Inheritocracy: It's Time to Talk About the Bank of Mum and Dad” published in September 2024. The holder of a PhD in contemporary British history from the University of Warwick, she began her career as a lecturer on modern British history at King's College London.
