Plan to raise £10k for all 25-year-olds

Elias Hubbard
Мая 8, 2018

The foundation says the lump sum would be funded by a change to the controversial Inheritance Tax, reports The Guardian.

It says that all young people should receive a £10,000 windfall at the age of 25 to help pay for a deposit on a home, start a business or improve their education or skills.

The so-called "citizen's inheritance" could help fix the "broken" inter-generational contract between baby boomers, many of whom own their homes, and millennials, who have struggled to get a foot on the housing ladder.

It would be paid for by limiting tax-free inheritance to £125,000 with anything above taxed at 20 per cent up to £500,000 and 30 per cent after that.

The Resolution Foundation's Lord Willetts said the proposals were "not easy" but many no longer believe Britain's young and old are being treated fairly.

The idea is underpinned by analysis that shows inherited wealth will have an ever greater effect on standards of living, with inheritances and gifts from parents set to grow in size much faster than incomes.

The intergenerational commission's proposals may seem radical, but they were reached by a panel chaired by former Tory minister David Willetts and Carolyn Fairbairn, director general of business group the CBI, along with TUC union chief Frances O'Grady.

Consequently, the think tank suggests: "The council tax has become most generous to older households and most onerous for younger generations when measured as a proportion of property value".

Ms O'Grady said: "Today's young workers shoulder huge risks". We expect the state to support these natural instincts, but too often it is tilted in the opposite direction. Millennials at age 30 earn no more than the generation before them and rates of home ownership have fallen, with renting or remaining in the family home the only options for many after years of rocketing house prices, it said. They are also four times more likely to rent in the private sector.

However, some millennials have admitted that the temptation to mismanage the money or use it on shopping purchases would be high.

"£10,000 is not even enough for a deposit and I don't want to deal with my pension until I am in my late 30s".

"I think we still care about it", Lord Willetts said. "But if there were no restrictions I would be straight down to Selfridges". Maybe you could put it into a bond while you get the rest of the money together.

Council tax should be abolished and a property tax introduced in its place that would include surcharges on second and empty homes but stamp duty would be halved to encourage people to move, under the report's plan.

By increasing tax rates the think tank argues more than £2b can be raised, allowing greater funding for national health and social care.

The report also produced several other key recommendations, including a £10,000 payment given to those at the age of 25, charging National Insurance on the earnings of those above the State Pension age and proposed an extra £2.3bn per year for the NHS to address health and social care for those over the age of 65. "Families are doing their best, the bank of mum and dad helping out the kids, younger people caring about their grandparents, but when you look at public policy, there are older people anxious about their social care, there are people of middle age who still aren't owner-occupiers, and that's what they want to be, and there are younger people whose pay is no higher than it was 10 or 15 years ago, so there's a problem in public policy".

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