Report: Give millennials £10k to fix generation gap
Is this a good idea? A bold new report has urged the government to give all 25-year-olds £10,000. It says the cash will help young people buy homes, learn new skills and start businesses.
In 1953 in Britain, a young family could buy a house for just £1,891. In 2018, 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 by the Resolution Foundation in a report 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.
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.
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. It’s 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.
- Do millennials deserve cash handouts?
- If you had £10,000 and no restrictions on how to use the money, how would you spend it? Discuss your ideas with your classmates. What are the most popular suggestions in the class? Why might people want to spend the money in this way?
Some People Say...
“The reason we blame things on previous generations is there is only one other choice.”Doug Larson
What do you think?
Q & A
- What do we know?
- There are also some positive trends for millennials. For example, people in their late 20s experience unemployment rates around 25% lower than those felt by baby boomers at the same age.
- What do we not know?
- If the government will listen to the foundation’s recommendations. Lord Willetts himself said that some of the changes suggested are not “easy or comfortable”.
- Adjusted for inflation, this figure is equivalent to approximately £50,000.
- Social contract
- The Resolution Foundation report describes a generational contract in which young people expect better lives than their parents, and the elderly expect to be cared for in later life.
- The £10,000 payments would be funded by adjustments to inheritance tax. Council tax would also be replaced with a property tax aimed at wealthier homeowners.
- Generation before them
- Those born between 1966-1980, otherwise known as Generation X.