Covid-era intergenerational equity gains now in retreat

Binaya Dahal

Journalist

1 May 2026

The gap between younger and older Australians narrowed during COVID-19, aided by government policy, but is now quickly eroding as economic, housing and social pressures intensify, an Actuaries Institute report finds.

The Australian Actuaries Intergenerational Equity Index, which tracks 25 indicators across six domains, shows all age groups are better off than in 2000 and inequality remains below its 2019 peak, but progress has reversed sharply since the pandemic.

The index revealed oldest cohorts gained more than three times as much wealth as the youngest over the past two years, with those aged 65 to 74 pocketing an average of $375,000 and those aged 45 to 54 gaining $336,000, compared with just $98,000 made by 25–34-year-olds.

Led by institute members Dr Hugh Miller, Dr Laura Dixie, and Shams Mehry, the analysis was formed on the combination of six domains consisting economic & fiscal; health & disability; housing; social; education; and environment.

“There is a long-held hope that each generation will leave the next a little better off. Right now, that hope is not being fully met. Under current policy settings, we’re on track to again reach record levels of disparity within years,” Dr Miller said.

Housing affordability remains the most persistent drivers of worsening intergenerational equity, though the report noted some improvement in home ownership rates among younger Australians.

“Lower post-pandemic interest rates plus some government interventions appear to have made a difference,” Dr Dixie said.

“But issues remain. Many young people rely on the ‘Bank of Mum and Dad’, and while this helps some, it worsens inequity within age groups and embeds advantage for people born into wealthier families.”

Furthermore, government spending patterns have emerged as the largest contributor to declining intergenerational equity, with the gap in fiscal support between age groups more than doubling in favour of older generations.

Net government debt as a share of GDP has also risen sharply, with today’s 30-year-olds effectively inheriting a 20% debt burden, compared with just 2% faced by today’s 50-year-olds when they were the same age.

Actuaries Institute chief executive Elayne Grace said structural policy settings are reinforcing the divide between generations.

“Many policy settings around housing, retirement and tax implicitly favour existing asset holders, reinforcing intergenerational gaps,” Grace said. “Additionally, Australia’s ageing population increases pressure on spending on older cohorts while shrinking the working age tax base.”

Mental health and obesity trends are also disproportionately affecting younger Australians, with studies pointing to higher anxiety levels and lower life satisfaction among that cohort.

However, some measures show progress, as unemployment has reached its lowest level this century since 2022 and younger Australians are recording the greatest employment gains.

The gender pay gap has also hit the record low, driven largely by gains among the 25-34 age group, which the study flags as a positive contributor to intergenerational equity.