Europe News

Give £10,000 to every 25-year-old to ease UK generation gap, think tank proposes

Shafi Musaddique
Key Points
  • Report recommends a one-off 'citizen's inheritance' of £10,000 for 25 year olds to help heal the "broken" link between young and old in the U.K.
  • Britain is more pessimistic than most advanced economies on the chances young people have in living better lives than their parents
  • Critics say the scheme is a short-term bribe

Millennials in Britain should receive a one-off payment of £10,000 ($13,500) as soon as they turn 25 to help heal the "broken" intergenerational link between young and old, according to a prominent think tank.

A "citizen's inheritance" could boost the economic and social prospects for young people in Britain, said the Resolution Foundation's report, authored by top business leaders, trade union bosses and journalists and published Tuesday.

More than six in 10 millennials in their late 20s in the U.K. would find their wealth almost doubled in receiving £10,000, "enough to fund a master's degree or significant retraining," the report said.

The foundation said that additional inheritance payments should be offered to older people, starting with those turning 35 in 2020.

It recommended that the British government should tax pensioners more to fund the National Health Service (NHS) and address the imbalance of living standards between young people and older generations.

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Young Britons aged between 16 and 32 earn less than their parents did at the same age in real terms while they are less likely to be home owners compared to both 'generation X,' born between 1966 and 1980, and the 'baby boomer' generation born after World War II.

"Younger generations are bearing more risks and holding fewer assets than their predecessors. We need to redress that imbalance if we are to maintain the promise of an asset-owning democracy," the report's authors said.

A poll conducted by the Resolution Foundation in 2017 found that Britain is more pessimistic than most advanced economies on the chances young people have in living better lives than their parents.

Only Spain, Belgium and France are more pessimistic about young people's prospects, with 18 other countries ranking higher than the U.K.

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"No longer can anyone deny the challenge facing us as a country in maintaining a fair deal between the generations," said Lord David Willetts, who commissioned the report. "If the evidence is so powerful then that means there is an obligation to act."

Free market think tank the Institute of Economic Affairs (IEA) criticized the proposal of handing young people a windfall.

"Why should the salary of a 40-year-old person, earning the minimum wage, be redistributed to top-up a 25-year-old, earning double or triple the average national income? There is nothing progressive about cash transfers that are based on age," said Kate Andrews, editor at the IEA.

"What is essentially a short-term bribe will not distract young people from the barriers to entry they face when trying to transfer into adulthood," she added.