PENSIONERS have been cleared of causing a cash crisis for younger generations, and are not the wealthiest group in the country, according to a report.
The study by the TUC claims the so-called baby boomers are not to blame for contributing to wealth inequality among generations.
It described as a myth the claim that all pensioners were hoarding their money, resulting in the difficulties of young people, adding that reducing older people’s benefits was not the solution to the problem.
The findings of the report, published at the weekend, reveal that people of working age are those most likely to be wealthy, with two thirds of the richest 10 per cent of households aged between 45 and 64. Only about a quarter of such households are aged 65 or above.
It acknowledges the young generation will end up poorer than their parents. But Frances O’Grady, the TUC general secretary, said: “Big cuts to working-age social security benefits over the past five years, combined with relative protection for some pensioner benefits, sparked divisive debate about intergenerational inequalities and whether the so-called baby boomer generation have been feather-bedded at the young’s expense.”
The report claims improving the chances of young people who, unlike the baby boomers, are faced with tuition fees and runaway house price inflation, requires a shift towards taxing homes rather than incomes.
It calls on the government to focus on improving jobs and wages for the young, and helping them to get on to the property ladder. Author James Lloyd, director of the Strategic Society Centre, analysed the UK Wealth and Assets Survey by researchers at the University of Bristol to produce his findings.
His report said that while rising house prices had “seen some older households accumulate as much wealth during retirement as during their working lives”, there is “substantial inequality” among pensioners, with only 5 per cent paying higher-rate income tax. It said: “Cuts in support for older people will eventually become cuts in support for today’s young workers.
“Reducing public expenditure on pensioners as a means to increase spending on young people would not provide the answer to the challenges today’s new labour market entrants face, leaving wider inequalities untouched and young people even worse off as they grow older themselves.”
The Ready for Ageing Alliance has warned “the term baby boomer is increasingly used as a term of abuse”, with an “increasingly polarised public debate” pitching generations against one another.
A government spokesman said: “Our economic plan gives everyone the chance to get on, at every stage of their lives. This includes the dignity of a job, the security of a pay cheque, and the chance of a home of their own.”