Report: Give millennials £10k to fix generation gap

In 1953 in Britain — the year of Queen Elizabeth II’s coronation and James Bond’s first appearance in print — a young family could buy a house for just £1,891. According to 2018’s most recent figures, the average house price is now more than £220,000 (rising to over £430,000 in London).

Yet astronomical house prices are just one factor in the “broken” social contract between home-owning baby boomers and millennials struggling with sluggish wages and an inaccessible housing market.

The solution? A “citizen’s inheritance” of £10,000 paid to all 25-year-olds, funded by extra taxes on rich baby-boomers and pensioners. At least that’s the plan put forward in a report from the Resolution Foundation released yesterday.

Recipients would be allowed to put the money towards four things: a deposit for a house, education, starting a business or pension savings. How far the money would go depends on a variety of factors.

For example, £10,000 might cover half a deposit on a house in the north of England, but would be less than 10% of the average down payment in London. Also, it would not make much of a dent in the £50,800 debt the average graduate now leaves university with.

Nonetheless, the foundation’s chairman, Lord David Willetts, claimed that without a change, young people would become “increasingly angry”. He described a “very serious problem of ensuring there’s a fair deal across the generations”.

According to the report, millennials are half as likely to own a home by the age of 30 compared to when baby boomers were the same age. Wages have also stagnated, with those born between 1981 and 2000 taking home less pay than the generation before them.

All this has led to widespread pessimism. One survey found that 50% of Britons believe that young people will have a worse life than their parents. Only 22% thought that life would be better.

Should all 25-year-olds be given £10,000?

Magic money tree

Of course, some argue. Recipients who invest in education or a new business could boost their earnings later in life — which is also good for the economy. Furthermore, the safety net it provides would encourage more people to take positive risks in their career, rather than always worrying about the next bill. It is the duty of the government to make meaningful investments in young people. This is the best way.

It’s a terrible idea, others respond. Ten thousand pounds is not enough to help the most disadvantaged, and will just top off the trust funds of the most privileged. We can help millennials buy homes by building more houses, while extra tax revenue should come from corporations, not pensioners. Excess money should be distributed fairly to those who truly need it.