New pensions freedoms came into force last week. Whether they want to blow their pension pot on a Lamborghini or keep it for a rainy day, the baby boomers are no longer going to be obliged to use it to buy an annuity. Under the new rules, they will also have the right to pass on what’s in their pension without paying any inheritance tax when they die, a measure likely to further reduce taxes paid by a generation that has done well out of the welfare state.

Meanwhile, recently published research paints an alarming picture of how people in their 20s have been faring in the recession. They have seen real wages drop by more than 12% since 2009, more than four times that experienced by workers aged over 60. “It’s been a terrible recession for young people,” says Gavin Kelly, chief executive of the Resolution Foundation thinktank that published the analysis. “As well as the pace and scale of the falls in pay, young people’s employment levels have been hit much harder than those of other groups.”

As the election draws closer, is this a sign of a growing generational dividing line in British politics? In his 2010 book The Pinch, David Willetts, the retiring Conservative MP, argued that the baby-boomer generation – those born between 1945 and 1965 – had done much better financially than the generations that came before and after. They have enjoyed record rates of home ownership, benefitting hugely from house-price growth that has far outpaced growth in average incomes. Thanks to a welfare state settlement that has worked in their favour, they will draw more out than they paid in. Many have generous defined-benefit pension schemes that have now all but disappeared from the private sector.

Crucially, Willetts argued, baby boomers have enjoyed these benefits at the direct expense of younger generations. Spiralling house prices have locked many young people out of home ownership altogether, and it is younger workers who will end up paying for the generous benefits and pensions that baby boomers will be drawing down. Thus The Pinch paved the way for a new discourse about intergenerational conflict.

Received wisdom is that this conflict is being magnified by electoral dynamics. The older generation is a much more powerful force at the ballot box. “The democratic deficit affecting young people is definitely impacting on how much attention parties pay to their concerns,” says Bobby Duffy, managing director of Ipsos Mori. Not only are younger people less likely to vote, they are much less likely to say they feel attached to one political party, creating a double incentive for parties to focus their offers towards the older generation. But he sounds a note of caution: “People don’t vote as selfishly as is sometimes portrayed. It is too simplistic to think they make a personal calculus about what their vote means for them as an individual.”

There is certainly evidence of intergenerational solidarity in people’s attitudes. Young people are three times as likely to favour pensions over unemployment benefit in welfare spending, despite historic rates of youth unemployment. And older generations worry about the challenges today’s young people face. Fred, an 86-year-old former PE teacher who lives in Islington, London, attends a weekly discussion group at his local Age UK, the charity for older people. He says the challenges facing the younger generation often come up: “It’s terrible. If you get a couple earning a good salary they still can’t save for a deposit or buy a house. It was so much easier for us.”

But while concern for the plight of other generations clearly exists, attitudes can manifest themselves in complex ways when the issues in question are what economists refer to as “zero-sum”: when improving the lot of one group directly reduces that of another. Housing is a classic example: making housing affordable means stopping – or at least slowing – house price growth to the detriment of those already on the housing ladder. “We get contradictions in people’s responses on these things all the time,” says Duffy. “They really want affordable housing for their children, but they’re also keen to keep the equity in their property.” Other examples of zero-sum issues include deciding whether to prioritise benefits for pensioners over those for people in work.

Though conflicting attitudes on these issues may exist among older voters, in recent years politicians seem to have plumped for the options that protect older people. It is the younger generation that has felt the impact of austerity most sharply, with retired households seeing their incomes rise by 10% since 2007.

David Lammy, the Labour candidate for Tottenham who is also running for his party’s nomination for the London mayor, thinks this is a big problem: “For too long now, the political class have largely been able to ignore issues facing young people and prioritise issues facing pensioners. Sadly, I think the election will largely be about deficit reduction, immigration and the NHS. There are a whole clutch of issues, like housing and employment, that are not featuring in the way they should.”

Housing charity Shelter estimates we need to build 250,000 homes a year to meet demand and prevent further spirals in house prices and rents – double current levels. All the parties have pledged to build more homes in the next parliament, but Lammy is sceptical these targets will be met.

“It’s not so much a case of whether the targets go far enough – it’s that they’re not going to be delivered. Both parties are saying you can leave it to the market, but private developers have never delivered more than 25,000 units a year.” Lammy thinks these targets can only be achieved if politicians reopen debates unpopular with the baby boomers, such as loosening restrictions on the green belt and the role of the state in investing in our housing stock.

But he is not optimistic: “No political party is committed to any of these things because they are still all signed up to a lexicon written by Thatcher and Blair.”

There are, however, limits to what we can understand about the winners and losers of intergenerational conflict looking at this purely through the lens of age. Kelly points out that, far from generation replacing class as a divide, it actually serves to accentuate the importance of class, as better-off baby boomers pass on wealth and connections to children and grandchildren. “To talk about generational divides and not class divides is missing half the point. People talk about the lost generation of young people but lots in that generation aren’t lost at all; they have tremendous prospects.”

To what extent are the dynamics of young versus old that are being played out in the housing market also evident in the labour market? As well as experiencing the biggest drop in wages since the recession, analysis by the TUC shows young people have been most affected by the rise of casual work and zero-hours contracts.

The under-employment of graduates is also increasing. Phoebe, 22, graduated last July from Lancaster University. She moved back to live with her parents in Bristol, where until recently she worked in a bar on a zero-hours contract. “It was really difficult to plan because even when I was getting lots of work I didn’t feel I could turn any down,” she says. She felt her employer took advantage of her graduate-level skills by getting her to do work outside her job description, even though she was only on the minimum wage.

Kelly says people’s experiences in their 20s have far-reaching impacts. “If you have a really bad experience of the labour market in your 20s it is very difficult to make up that lost ground. I think it’s doubtful this generation will catch up to where they should have been.”

However, he thinks it is too simplistic to view job issues in terms of young versus old. In the short term, higher employment rates among older workers have probably hit younger people’s employment prospects. But this has been partly a consequence of the drive to encourage older people to work longer as life expectancy increases – something economists agree is critical to long-term stability of the country.

Perhaps more significant than all of this are some of the long-term structural shifts in the labour market: the growing number of jobs in low-skill service sectors such as care. Lammy believes that politics is also guilty of a failure to find solutions to this: “We’re seeing a preference to challenge employers to raise their salary rather than having a meaningful conversation about how we create better quality jobs.” He argues that, despite both parties pledging to increase apprenticeships, there has been a focus on numbers at the expense of quality.

This failure of politics to address these labour market challenges is perhaps the result of its broader struggle to respond to long-term structural and social shifts, rather than of the prioritisation of baby boomers at the expense of younger people. In fact, there has also been a similar failure to adequately react to some of the challenges facing the baby boomers themselves. With an ageing population come greater care needs. Isolation and loneliness, already affecting significant numbers of older people, look likely to become bigger issues as we see the number of childless older people increase.

Alex Smith, 32, set up an intergenerational volunteering project, North London Cares, in 2011. It brings together young professionals with local older residents to provide mutual connection and companionship. He believes the discourse on intergenerational conflict – with its emphasis on the financial – is too simplistic: “In the modern world there aren’t enough opportunities for people from across the generational and social divides to interact.” Intergenerational volunteering benefits older and younger people alike. “I get loads out of it. It means I get to meet different people who I would not have met otherwise,” says Mike, a volunteer.

Could intergenerational projects like these offer broader lessons on how to tackle challenges faced by both the younger and older generations in a way that promotes intergenerational harmony rather than conflict? As they approach retirement, baby boomers are unlikely to be satisfied with existing standards of care. Underpinning this is the nature of the care profession: having poorly paid and supported workers doing emotionally stressful and physically demanding care work under significant time pressure is hardly a recipe for quality care.

But the nature of these jobs, which will be a growing part of the labour market, is also an issue for the younger generation: as currently conceived, they offer limited potential for fulfilling work. Indie Shergill, 26, and Nadia Daghistani, 25, are two social entrepreneurs optimistic that care could become a profession of choice for young people. After university, they took part in a postgraduate course for budding social entrepreneurs, Year Here, which involved a four-month work placement in a care setting.

Both observed a lack of emphasis on providing interesting, engaging, mentally stimulating activities in too many care settings. “Working in care is a hard job that is underpaid and underappreciated – it doesn’t seem to have room for your own spark and personality,” says Shergill. He believes there is much more scope for creativity and fulfilment in care work if jobs are structured in the right way: “Just because care is an essential job doesn’t mean it can’t be fun and rewarding.” They have both continued to work with older people through their social enterprise, Rootless Garden.

It would be an over-generalisation to characterise these kinds of labour market and care issues with the same intergenerational dynamic playing out in domains like housing and welfare. Instead, we are seeing a failure of politics to respond to some of the big sociological trends affecting both generations. The nature of the problem is fundamentally different. In housing, there is a lack of political appetite to engage with the reforms needed to improve affordability, which would be to the detriment of the baby boomers. In care, there are questions about whether we really know how to create high-quality services for the elderly and better jobs for the younger generation.

What these issues have in common, however, is that they are far from centre stage in the election debate. The fragmentation of the electorate we have seen emerge in recent years has contributed to that. But this fragmentation is a trend rather than a blip: Ipsos Mori has projected that by 2024 only a quarter of the population will feel attached to one party, compared with half in 1983. Big questions remain about what a more permanently fragmented electorate will mean for the political response to these challenges facing both older and younger generations in the years to come.

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