What is the commission?
The Resolution Foundation convened the Intergenerational Commission with the goal of exploring the questions regarding intergenerational fairness that are at the forefront of the current agenda. To better understand these issues, the Foundation has gathered leaders from fields that range from business to academic to policy-making. They will aim to create a means of repairing the social contract between different generations.
Students and researchers will likely be interested in the results of this convention as its findings will be impactful for our society at large. If you are a student writing an essay or dissertation on the topic, it can be difficult to complete it all on your own. If this is the case for you, you can look for professional academic help from the best essay writing service. Don’t let hardships discourage you from completing your assignment.
Executive summary
The intergenerational contract is the principle that different generations provide support to each other throughout the different stages of their lives. This principle is essential for understanding interpersonal relationships, the functions of society, and the role of government, among other things. From education to finances to healthcare to pensions, the intergenerational contract is ever-present in our lives and all aspects of our society.
We often take the intergenerational contract for granted, but it is now under threat due to the widespread concern that young adults might not be able to able to achieve the same progress their predecessors did. In Britain, the majority of all age groups believe that the well-being of our society depends on how we provide for older generations and that each new generation should have a better life than the previous one. Though there are many people who are optimistic, there are still more pessimists today when it comes to this matter.
The pessimism is most pronounced when it comes to the key economic aspects of living standards: housing, work, and pensions. Thus, we examined the experience of different generations to determine whether this pessimism is justified. Here are our key findings:
- Post-crisis employment has been arguably quite strong, but young adults still experience incredibly poor pay outcomes.
- Millennials have lower homeownership rates as well as higher housing costs than previous generations.
- Current and upcoming reforms are boosting pension savings but working-age adults today face risks that their predecessors were protected from.
- Compared to older generations, young adults nowadays are making no income progress and accumulating significantly less wealth.
- Young adults are not the only ones affected by challenges on the way to building a better Britain. While millennials are the most affected, older generations suffer too (for example, rising housing costs are decreasing the living standards of all generations).
Though families are responding to these challenges, the state has largely failed to adapt to them. More young adults are living with their parents than before, and more adults are caring for the elderly, ill, or disabled relatives. Here are some recommendations we propose:
- We recommend a public funding increase of more than £2 billion for social care from a replacement to council tax with an increase in property-based private contributions towards care costs. These charges should be limited by a strict asset floor and cost cap so that no one can be asked to contribute more than a quarter of their wealth for their own care. This will help provide healthcare services to older generations in a generational fairway.
- We recommend boosting employment security through the right to a regular contract for those who do regular hours on a zero-hours contract, extending statutory rights for the self-employed, and minimizing notice periods for shifts. This will reduce labor market risks and restart progression for young adults.
- We recommend making indeterminate tenancies the sole form of a private rental contract with light-touch rent stabilization that limits rent increases to inflation for three-year periods and disputes settled by a new housing tribunal. This is just one of the several recommendations we propose to provide immediate housing security while working to turn around our housing crisis.
- We recommend requiring firms contracting self-employed labor to make pension contributions, lowering the earnings threshold above which employees get auto-enrolled, and providing bigger incentives to save among low- and middle-earners by flattening rates of pensions tax relief and exempting employee contributions from National Insurance. This and other recommendations will help reduce risks around younger generations’ pensions.
- We recommend abolishing the inheritance tax and replacing it with a lifetime receipts tax that is levied on recipients with fewer exemptions, a lower tax-free allowance, and lower tax rates. The extra revenues will support a £10,000 “citizen’s inheritance,” a restricted-use asset endowment for all young adults to support skills, entrepreneurship, housing, and pension saving. This recommendation will help harness the power of assets to boost security and opportunity today to respond to tomorrow’s challenges.
Implementing these changes won’t be easy, and renewing the intergenerational contract will definitely take time, but it is necessary for the long-term prosperity of our society and for building a better Britain.