A new report from the Resolution Foundation will likely elate millennials and anger retirees in equal measure with proposals to give young people a lump sum of £10,000 while taxing pensioners more.
Two of the main parts of the report are focused around finding additional funding for the National Health Service while attempting to bridge the intergenerational divide in terms of wealth and home ownership. According the foundations chairmen, Lord Willets, the social contract between the younger and older generations had deteriorated and without action younger people would become “increasingly angry”.
He said: “Britain’s contract between generations lies at the heart of society. As families we provide for our children and parents at different times. We expect the state to support these natural instincts – but too often it is tilted in the opposite direction.
“Many people no longer believe that Britain is delivering on its obligations to young and old. But our commission shows how Britain can rise to this challenge.”
In the report it was also proposed that additional funding would be raised by abolishing the current council tax method and replacing it with a property tax which would be aimed at generating more income from wealthier home owners. It also stated that inheritance tax should be removed with everyone receiving a £125,000 limit before tariffs come into play which would then in turn fund the £10,000 gift to those of the age of 25 with the aim of helping them start a business, get on the property ladder or pay for training and qualifications. The foundation’s Intergenerational Commission also stated that around £2.3bn of funding for the NHS should be stumped up by raising the national insurance contributions of those aged over 65.
The report was a cross party effort with contributions from TUC general secretary Frances O Grady and Carolyn Fairbairn who is the CBI director general with Lord Willets himself being a former minister for the Conservative party.
Ms Fairbairn said: “The idea that each generation should have a better life than the previous one is central to the pursuit of economic growth. The fact that it has broken down for young people should therefore concern us all.
“We need individuals, businesses and the state to pull together to address this challenge and lift the living standards of young and future generations.”
The commission’s report also spoke about improving security employment and giving renters better rights. One of the key findings that led to these suggestions was that millennials who are categorised as those born between 1981 and 2000 were paid the same salary on average as those who lived and worked 15 years before them and were half as likely to own a home by 30 as baby boomers.
Former Tory pensions minister Baroness Altmann however raised concerns of the affect that this could have with the old generation.
“Only about one in 10 pensioners continues working past state pension age and are not all well-off. Many older workers keep working because they do not have good pensions and are trying to make ends meet” she said.
“It is wrong to see them as an answer to the care funding shortfall. Why should they be targeted to pay for other people’s care while non-working pensioners, many of whom have generous, often taxpayer-funded, pensions would pay nothing?”
Although the proposals have proved popular with some people, the divisive nature of the report is likely going to prevent any drastic changes from happening anytime to soon.