Following a two year study, an influential thinktank has concluded that every young person in the UK should receive £10,000 when they turn 25.
The “citizen’s inheritance” would be necessary to reduce resentment towards baby boomers (born 1946-65) as well as redistribute the wealth to millennials.
The final report was produced by the Resolution Foundation and said millennials could use the money to buy housing, start a business or return to education.
“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 reads.
The report said that the citizen’s inheritance could be funded by a change to inheritance tax. Currently, inheritance is taxed at 40 percent above £1 million but the report suggests taxing all gifts or inheritances up to £500,000 by 20 percent, and then at 30 percent above that.
The report is based on the idea that inherited wealth will always have a greater effect on standards of living, however many millennials are not able to receive an inheritance from parents.
“This poses challenges. Many will not inherit, and those that do are likely to receive this support shortly before retirement rather than in the expensive family-raising years.”
“Inequalities of income within generations are higher for younger people today than for their predecessors,” the report says. “There is a risk that the growing importance of inheritances means intergenerational gaps combine with intragenerational inequalities to hold back social mobility.”
The panel for the report was chaired by David Willetts, the former Conservative universities minister. The panel also included the TUC secretary general, Frances O’Grady, and the CBI director general, Carolyn Fairbairn.
The report also suggested an extra £2.3 billion per year for the NHS to help tackle unmet care felt by those over 65.