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Give all 30-year-olds £10,000 ‘citizens inheritance’, says Tory peer

David Willetts
Lord Willets said 'a world in which inheritance matters more and earnings matter less is a less open and socially mobile society' - Geoff Pugh

All 30-year-olds should be given a £10,000 “citizens inheritance” to redistribute wealth, a Tory peer has said.

Lord Willetts, who heads up think tank Intergenerational Centre, said inheritances are now coming to people too late in life and that a growing number of younger people face renting into old age.

He has argued that a generous payout from the next government to those born between 1981 and 1996 would help to level the playing field.

The share of family units aged 19 to 29 who owned their homes fell by two-thirds between 1989 and its lowest point in 2013, from 23pc to 8pc according to the think tank’s research.

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This meant in 2021 young people were just half as likely to own their own home compared with young people thirty years ago, while 74pc of family units aged 65 or over now own their home – more than double the 34pc that did in the early 1960s.

Lord Willetts told the Guardian: “It doesn’t matter if you are Conservative or Labour, a world in which inheritance matters more and earnings matter less is a less open and socially mobile society.

“[Inheritances are now] coming to people quite late in life. It will reinforce a pattern of inheritance where the grandkids will benefit. We are going to have some very rich inheritors and a growing number of people who never get on the housing ladder and rent until old age.”

In 2019, the Tory peer published a book on the generational wealth divide called ‘The Pinch’. In it, he said baby boomers – those born in the mid-1950s – can look forward to a “welfare dividend” of £291,000 during their lifetimes, whereas those born in 1996 will get just £132,000.

Critics have since accused Lord Willetts of pitching “young against old”, saying he risks dumbing down the debate and presenting simplistic arguments which “dehumanises older people as the undeserving rich”.

While younger generations are receiving inheritances later, a report by the Institute for Fiscal Studies back in 2021 suggested the size of these inheritances are now much greater than their predecessors.

For those born in the 1980s, average inheritances compared to lifetime income will be almost twice as large as for those born in the 1960s – 16pc of lifetime income versus 9pc.

In December, the former Bank of England governor Lord King said the UK’s unstable family structures and lack of job opportunities were to blame for adolescents being less financially secure than baby boomers.

He referred to another IFS report, which showed 23pc of British families are headed by a single parent – compared with an EU average of 13pc.

Lord King also pinned it on the increasing cost of university, saying that unlike young people today he benefited from a “totally free education” and was able to afford to buy a house more easily.

Lord Willetts’ suggestion mirrors a similar proposal made by the Resolution Foundation back in 2018 to give every 25-year-old £10,000 to help them buy a home.

Critics were quick to point out it would be unfair to expect older workers to bankroll younger generations who have been in the workforce for far less time.