Young people start off life with more debt and less assets. But what if they never catch up?

Older New Zealanders hold the bulk of the country's wealth – and society has created extra hurdles to stop younger people working their way up to join them, researchers say.

Data from Statistics New Zealand shows that people aged 55 to 74 have total personal net worth of $744 billion.

That is compared to $197b for people aged 25 to 44 and $300.5b for people aged 45 to 54.

Researcher Jess Berentson-Shaw said it was potentially problematic that older people held so much more of the country's financial resources.

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SUPPLIED Jess Berentson-Shaw said there were issues when certain groups had more advantages than others.

"It's a problem when we have policies that don't distribute wellbeing across time and between generations, but rather locks it in for one group, while excluding others.

"People of the Baby Boomer generation have done well because we had policies that helped them do well, and then maximise the assets and wealth they acquired from such policies.

"Unfortunately some of those policies meant disadvantaging others - which is a hard thing for people to hear when they were not responsible for putting those policies in place."

Those policies included selling off public assets, she said, which meant people who could take advantage of the sales did well but those with less money could not invest and lost the benefit of the publicly-owned assets, too.

"And then people in both Labour and National Governments implemented new and different tax, welfare, education, housing policies, that didn't award the same advantages to the next generation. So it hard-coded differences between the generations."

Economist Shamubeel Eaqub said the older generations now had proportionally more wealth compared to the rest of the population than older people had traditionally had in the past, because of declining home ownership among young people.

As house prices have risen in recent years, the wealthier have become wealthier while the gap to those without assets has increased. Home ownership rates are highest for those aged 70 to 74.

"People accumulate wealth over time. Fewer younger people can do so now because of all the issues that have driven lower home ownership rates."

New Zealand's home ownership level is now at a low not seen since 1951.

The Baby Boomers had more than $200 billion tied up in their own homes and $54 billion in other real estate.

That is compared to $190 billion for those aged 35 to 54, who were a larger proportion of the population and carried significantly more debt.

Green MP Chloe Swarbrick breaks out "OK Boomer in the house". Her comment stoked a new round of commentary on the Boomer v Millennial generational divide.

Eric Crampton, chief economist at the New Zealand Initiative, said there was a standard life cycle for wealth, of taking on debt while people were young and building assets over time.

"There is no problem in retirees having a lot of wealth. If people on average didn't have more wealth when they retired, that would be a problem. But what is a problem is the way that a lot of people with a lot of wealth in housing have worked to make it very, very hard for others to build more housing – town hall meetings blocking upzoning and urban expansion seem disproportionately attended by relatively wealthy homeowning retirees."

Eaqub said it should not be expected that the situation would come right when older people eventually passed on an inheritance to their kids.

"Boomers will live a long time. I think the life expectancy at 65 is now 89 years. So they will consume a lot of wealth to fund their retirement. There may be less left than their children may want."

Brad Olsen, an economist at Infometrics, agreed. "With people living longer, and with costs, especially housing costs, remaining at higher levels than previously seen, the amount passed down between generations will likely decrease in relative terms. Those who retire will use up more of their net worth over their retired lifetime, so will have less to pass on to the next generation down."

The highest earners in the population are those in paid employment aged 40 to 54, who earn a median $1151 a week.

Olsen said people who had less would pass on less, potentially exacerbating the "wealth divide".

"Who is to blame is much less important than what we plan to do about the situation we're in. It's all good and well to throw stones at various generations for what they have or haven't done, but if we actually want things to change - higher home ownership, lower relative housing costs - we need to rapidly shift our energy from blame to action. Otherwise we seem destined to repeating the same mistakes over and over.

Berentson-Shaw agreed: "The solution is to redesign the system of policies, not to blame individuals."

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