The Evolution of Social Class in Modern Britain
Traditional social classifications of working class, middle class and upper class are becoming increasingly irrelevant for today's younger generations, according to a leading economist. Renaud Foucart, a senior lecturer in Economics at Lancaster University, argues that three new categories better reflect contemporary British society: Dinks, Alices and Henrys.
The Disappearing Dream of Home Ownership
'When your parents were in their 20s and 30s, they probably had a job, a house and financial security,' Dr Foucart explained in an article for The Conversation. 'A generation later, you get a variety of food they could not have imagined, low-cost air travel and a smartphone more powerful than the fastest supercomputers of the 1990s.'
'This new reality is leading to the resurgence of a different kind of class identification for young people.'
The fundamental shift, according to Dr Foucart, revolves around housing. Since 2000, UK house prices have increased twice as fast as other goods and services. The share of young Britons who own their homes is now 25% lower than in 1990, creating entirely different economic realities for millennials and Generation Z compared to their parents.
Meet the New Social Classes
Dinks (Dual Income, No Kids): These are couples who choose technology, travel and dining out over raising a family. 'The Dink lifestyle is attractive to some: more money and time for yourselves,' Dr Foucart explained. 'But on the salary of an average UK household, you still won't be able to buy an average house.'
Alices (Asset-Limited, Income-Constrained, Employed): Part of the 'working poor,' these individuals 'can't even dream of saving for a deposit,' according to Dr Foucart. They represent a significant portion of employed Britons who earn wages but cannot accumulate assets.
Henrys (High Earners, Not Rich Yet): These are professionals earning substantial incomes - approximately £100,000 annually - who still struggle with wealth accumulation due to high marginal tax rates and student loan repayments.
The Tax Trap for High Earners
Dr Foucart highlights the particular challenges facing Henrys: 'The moment you become part of the roughly 2 million taxpayers who earn £100,000 a year, your marginal tax rate becomes 60% - which means for each additional £1 you get, you only keep 40p.'
'If you are young and went to university, you also pay an extra 9% on student loan repayment, meaning you only keep 31p for each additional £1.'
Consumption Versus Assets
'What unites today's Henrys, Alices and Dinks is they can enjoy consumption levels their parents in the same social class would never have imagined, but can't buy the same house as them,' Dr Foucart added.
This explains why younger generations might prioritize lifestyle spending over saving. 'If you don't have hope of affording a home, why not spend more on your lifestyle?' Dr Foucart asks. 'If you're not saving for a deposit, buying avocados may simply be the most rational thing to do.'
Traditional Class Perceptions Persist
Despite these economic realities, traditional class identities remain strong in British self-perception. A recent YouGov survey found that 56% of the public consider themselves working class, while 36% describe themselves as middle class. Less than 1% identify as upper class.
However, Dr Foucart argues that social mobility has changed so dramatically that these traditional categories no longer accurately reflect economic realities for younger Britons.
The Housing Solution
While the situation appears bleak, Dr Foucart identifies a clear solution: 'That means building in less desirable locations, turning individual houses into flats, or overcoming opposition from older homeowners who often resist new housing developments in their neighbourhoods.'
The economist suggests that when older generations criticize younger people's spending habits, they fail to understand how relative prices have shifted. 'So, when your judgmental uncle remarks that "if you ate fewer avocados and lattes, you'd be able to buy a house just like I did", you may want to explain how the relative prices of an avocado and a house have changed over time.'
As housing continues to dominate economic realities for younger Britons, these new social classifications - Dinks, Alices and Henrys - may become increasingly relevant for understanding contemporary British society and its economic challenges.
