What does the Budget mean for London's Gen Z? Did John Healey do enough for young people?

Gen Z entered this Budget facing a daunting mix of challenges: stubbornly high rents, a difficult housing market, rising living costs and growing uncertainty about the future of work.Many young people had hoped Chancellor John Healey’s landmark Budget would deliver measures to boost home ownership, create opportunities and ease financial pressures on a generation that often feels locked out of traditional milestones.While Wednesday's announcement included policies aimed at increasing housebuilding and supporting economic growth, some measures will leave younger Britons wondering whether enough has been done to help them get ahead.From student loans and employment to housing and savings, here's what the Budget means for Gen Z.Student loans Calls for a freeze on student loan interest have been rife this year, particularly for those on Plan 2 loans. The income at which graduates must start making repayments is set to be frozen for three years, which means many graduates will start making payments sooner and be paying more each month.Worse still, the interest rate on Plan 2 loans is higher than other plans and countless graduates have seen their debt rise even as they make repayments. Martin Lewis met with John Healey ahead of the Budget on WednesdayPAIt is this which has prompted Money Saving Expert founder Martin Lewis to slam the Government for failing to take action on what he described “a moral wrong.” The government did commit to making the system fairer, but it seems that nothing was accomplished in John Healey’s Budget. A reverse of Rachel Reeves’ freeze on the Plan 2 student loan threshold was at the top of Mr Lewis’ list when he met with Chancellor John Healey ahead of the Budget. He told the BBC: “Many 18-year-olds were asked to sign contracts with the government about their student loans and the government is now retrospectively making those contractual terms worse.” He called the freeze a “moral breach” and a “breach of natural justice.” This has only been exacerbated by the NEET crisis which means hundreds of thousands of graduates without a job have accumulated interest without ever securing a job out of university. Read MoreNot to mention that repayments for the student loan are taken from a graduate’s gross salary, rather than their net income. Minimum wageMinimum wage is set to rise by 3.9%PA WireThe UK government continues to operate a tiered minimum wage system that pays younger workers aged between 18 and 20 less than adults aged 21 and over. While Labour pledged to get rid of this system, the Budget confirmed that it is still very much in place. Those aged between 18-20 years old will see a rise of 3.9% in their pay - the same increase as those aged 21 and above - but there will still be a disparity in pay. And while an increase in minimum wage seems like a good thing, it risks young people paying off their student loan sooner than they anticipated and at a higher rate. It also creates fiscal drag - which occurs when rising wages and inflation pull people into higher tax brackets. Given the UK personal allowance will remain frozen through April 2031, young workers will see a larger chunk of their income eaten by tax without gaining any purchasing power. Employment The ONS estimates that there are as many as one million NEETs across the country, with the Government desperate to get young people into the workforce. But the Budget risks pricing young people out of work. Gen Z have been priced out of workThe Standard/Pexels/GettyJohn Healey’s minimum wage increase and National Insurance threshold freeze is set to send hiring costs soaring for businesses across London and the UK. Squeezing businesses is likely to significantly reduce the number of entry-level jobs in the market - which will provide no comfort to a generation suffering from a NEET crisis. Lucy Mangan, Partner and Head of Tax Services at Menzies LLP, warned: ““Leaving the National Insurance threshold at £5,000 and frozen until 2031 means every rise in the National Living Wage pushes up employer contributions on each salary, and with the Employment Rights Act set to restrict the flexible contracts that labour-intensive firms depend on, many employers won’t gamble on entry-level roles at all.”No other solutions were presented by Mr Healey to remedy the NEET crisis, but there is a report underway by Alan Milburn, former minister of state for health. Mr Milburn will make recommendations to the government on the issue later this year. Some members of Gen Z expressed optimism that minimum wage increases will encourage people to work and to stay employed. HomesJohn Healey revealed his plan to get young people on the housing ladder - a £4.7 billion scheme called the Your First Home scheme. People will be able to buy a new-build home with a deposit of 2.5% and will be given a loan worth 20% of their property’s value . According to the treasury, the scheme could support the delivery of around 20,000 new homes - a measure which could be important in London give the shortage of affordable housing in the capital. London has suffered with a shortage of affordable housingThe StandardJohn Healey announced his Your First Home scheme in the Commons on WednesdayPAThe scheme has been launched to help those who don’t have “the bank of mum and dad” at their disposal. This is in addition to the “First Time Buyer ISA”, which will replace the existing Lifetime ISA in 2029, providing an account for savers to build up a deposit. The government will then top up the account with a 25% bonus for contributions of up to £4,000 a year. However, a hit to landlords could have ripple effects for young renters across the UK. John Healey announced an additional 2 percentage point increase in property income tax rates, which according to the OBR, could lead to a “steady rise” in rent prices. For young people yet to make it on the housing ladder, this could prove a problem and could exacerbate the housing crisis - particularly in London. Nouran Moustafa, financial advisor and founder at Roxton Wealth, said: “From April 2027, property income tax rates will rise to 24%, 44% and 49%. Some landlords may absorb those costs, but others could reconsider investing or selling their properties.“London already has an affordability problem. If rental supply tightens further, young Londoners could face even more competition for somewhere to live.”He added that a 2.5% as announced in the Your First Home Scheme will do little to “suddenly make London affordable” and that increased purchasing power could eventually be reflected in higher new-build prices. It is also worth noting that the Your First Home scheme is an equity loan - meaning it is only interest free for the first five years. Sean Boyle, a 21-year-old Londoner, told the Standard that he would’ve liked to see “measures that make it easier for young people to save money and get on the property ladder.” He told the Standard: “I work full-time and try to put money aside every month, but it can feel like no matter how careful you are, the cost of living makes it difficult to get ahead. Even small changes that leave people with more money in their pockets each month would make a real difference.”Sean Boyle was hopeful that the Budget would deliver on housing for Gen ZSuppliedYoung Entrepreneurs AllowanceJohn Healey has also tried to encourage young people to start their own businesses, introducing a scheme dubbed the “Young Entrepreneurs Allowance”. The allowance will cover living costs for young people in the first year that their business is launched. The objective of the scheme is to provide those without family financial backing with a springboard to put their ideas into action. Not much else is known about the scheme, but it is expected to be properly rolled out in due course. Speaking on the new scheme, Dr Anand Verma, CEO and founder at ExpectAI, said the scheme would allow young people to “take their first steps into self-employment and turn their ideas into viable new businesses.” However, he cautioned that young people would need support in the long run. “Rising energy bills, the costs of hiring staff and barriers to accessing finance can make it difficult for new businesses to survive, expand and create jobs. While the Budget measures could help ease some of the initial barriers to entrepreneurship, they do not remove the wider pressures facing small businesses,” he said.Cost of living Gen Z get a bad reputation for not going out as much as their millennial counterparts. They’ve become a generation associated with drinking less and staying in more. But it is little wonder when so many say they are being squeezed by the cost of living. A recent YouGov survey found that around 70% of Gen Z are worried about the rising cost of daily essentials, while 32% have lost sleep over their financial situation. File photo dated 26/04/16 of stocks of food at the Trussell Trust Brent Foodbank.PA WireJohn Healey’s Budget will pay £100 into the pockets of struggling households to help with soaring energy bills - a measure that could be a comfort to many young people. Meanwhile, tariffs on more than 100 supermarket products have been suspended, keeping prices down. As for going out, many have praised the Chancellor’s support for London’s watering holes and breweries. However, the Chancellor said alcohol duty, which is charged on every pint sold, will rise in line with Retail Prices Index (RPI) inflation, which stands at 3.9% This will push up the duty on a pint from 50p to 52p.The 2p tax increase in February will paid by producers and importers, but could be passed onto punters.The decision to increase beer duty, thereby increasing the price of a pint, might keep more Gen Z at home.