Resolution Foundation’s recent proposal aims to help young people by redistributing wealth in the form of a ‘citizen’s inheritance’.
‘A new generational contract: the final report of the Intergenerational Commission’ was published on 8th May, a report detailing the Commission’s conclusions and analysis of the intergenerational challenges that the country is currently facing. This includes the idea to introduce the £10,000 ‘citizen’s inheritance’ for those aged 25.
Following a two-year study, “drawing on a deep and wide-ranging examination of the experiences and prospects of different generations in Britain”, the resulting conclusion is that every person in Britain should receive £10,000 when they turn 25. From this initial phase, there will be a transition with the idea to eventually offer it to older ages, starting with those turning 35 in 2020.
This ‘citizen’s inheritance’ is to be a restricted-use asset endowment available to all young adults in order to support skills, entrepreneurship, housing and pension saving.
This is considered to be a way of bridging the gap between millennials and baby boomers. Do you think this is the right step to take?
Dave Willetts, Executive Chair of the Resolution Foundation, has stated in the foreword for the report: “It is very good news that fairness between generations has now entered the mainstream political debate. Too often we were drifting into decisions and policies which weakened our generational contract without being aware of what we were doing.”
The outlook of the report is a positive one, but it should be considered that we would be swapping one tax for another. The £10,000 inheritance would be funded by a change to inheritance tax. It would be instead replaced with a lifetime receipts tax with lower rates and fewer exemptions. It would be paid by recipients, rather than estates.
The report points out that “a £10,000 boost today would at least double the wealth of more than six in ten adults in their late 20s”.
What would you do with this inheritance? Or, more relevantly, what would you do as a 25 year old with access to £10,000 to invest your future?