The Intergenerational Commission, convened by the Resolution Foundation, issued its final report today after a two-year inquiry.
The commission said a “new generational contract” was needed to address challenges facing old and young alike and put forward over 35 recommendations, which it called a “radical blueprint” for the future.
As well as the £10,000 windfall for young people, these included a £2.3bn NHS levy to support social care funded from pensioners’ earnings, halving stamp duty for first time buyers and improving conditions for private sector tenants and those employed on zero-hours contracts.
David Willetts, executive chair of the Resolution Foundation, said: “Britain’s contract between generations lies at the heart of society. As families we provide for our children and parents at different times. We expect the state to support these natural instincts – but too often it is tilted in the opposite direction.
“Many people no longer believe that Britain is delivering on its obligations to young and old. But our Commission shows how Britain can rise to this challenge.”
The £10,000 for young people, dubbed the “citizen’s inheritance”, could be funded by a “lifetime receipts tax”, which would replace inheritance tax offering lower rates and fewer exemptions.
This money would be restricted use, meaning that beneficiaries could only use it for education, entrepreneurship, housing and pension saving, the commission said.
The commission also highlighted some stark economic differences between the generations.
Millennials, those born between 1981 and 2000, are half as likely as baby boomers, those born between 1946 and 1965, were to own their own home by 30, according to the think tank.
Analysis of Department for Work and Pensions data also showed that millennials’ disposable income has plateaued when compared with the older generation X (born between 1966 and 1980) despite the economy growing by 14% over the last 15 years.
Carolyn Fairbairn, director general of the CBI and member of the Intergenerational Commission, said: “The idea that each generation should have a better life than the previous one is central to the pursuit of economic growth.
“The fact that it has broken down for young people should therefore concern us all.
“We need individuals, businesses and the state to pull together to address this challenge, and lift the living standards of young and future generations.”
Frances O’Grady, another commission member and TUC general secretary, said young people faced insecure work and had little prospect of decent homes or pensions.
“To fix these problems we need an economy that works for all people – millennials and baby boomers alike,” she said.
“That means building more houses, giving everyone a decent retirement, and crucially stronger unions and rights at work.”
