Young people in Britain could be forgiven for despairing at the financial pressures they face—and feeling that previous generations enjoyed a much fairer economic environment. Then just to add to their worries about home ownership and a precarious jobs market, along comes the gloomy announcement that the UK’s public debt is now 100% of GDP.
That debt burden will have to be carried by tax-payers for decades to come. Paying the interest—just the interest—of the country’s debt currently accounts for around 7.3% of public spending. That’s more than what is spent on defense (4.8%) or transport (3.8%).
And while some of what’s left will go to towards essential future public services, it will also go towards fixing problems caused by a historic lack of public investment (less money being spent by previous generations) in water, railways and other crucial infrastructure.
In fact, in the 1980s much of that infrastructure was used by the UK government to help finance itself, with assets including British Gas sold off at a bargain price. Those baby boomers and older generations who could afford to buy shares often made a decent profit.
There are other kinds of costs that today’s younger generations have had to bear too. During COVID lockdowns, universities and schools were closed as the young were forced to stay at home, predominantly to protect the elderly. They have lost the freedom to live and work in the EU after 60% of retired people voted for Brexit, while most young people voted against. Leaving Europe has also made the UK less well-off.
But not everyone is poorer. In the last 20 years, the average income of pensioners has increased on average by more than 50%, while that of working-age adults has risen by less than 10%. The median income of pensioner households is now higher after housing costs than that of households with children.
Most of the country’s wealth is now in the hands of older people. In 2018, one in four people aged over 65 was living in a household with a total wealth of over a £1 million pounds. Poverty rates of pensioners are now lower than for the rest of the population.
Yet pensioners receive all sorts of unconditional discounts and benefits, such as free or discounted public transport. Their income is exempt from national insurance contributions, and there is a triple-lock on state pensions, which is guaranteed to grow faster than work income.
Until recently, the winter fuel allowance meant that anyone born in 1944 or before received £300 (reduced to £200 for younger pensioners).
Boomer and bust?
While there is mild popular support for limiting the fuel allowance to poorer pensioners, the question of recouping money from older people remains highly sensitive. (Back in 2017, the
