Stagnation Generation: Exploring Intergenerational Fairness John - PowerPoint PPT Presentation

Stagnation Generation: Exploring Intergenerational Fairness John Hills Richard Titmuss Professor of Social Policy, LSE Georgia Gould David Willetts Labour Councillor, London Borough of Camden Chair, Resolution Foundation Nona Buckley-Irvine Omar Khan Labour Party activist and former General Secretary of Director, Runnymede LSESU Trust Hosted by the Resolution Foundation and the International Inequalities Institute Hashtag for Twitter users: #LSELitFest

. Stagnation Generation: Exploring intergenerational fairness . LSE Literary Festival February 2017 RF

Britain has gone through baby boom and bust Births per year (millions) by generation: UK RF Intergencommission.org 3

Generational pay progress was the 20 th Century norm… Median real weekly pay by age for each generation: UK (RPIJ-adjusted) RF Intergencommission.org 4

Generational pay progress was the 20 th Century norm… Median real weekly pay by age for each generation: UK (RPIJ-adjusted) RF Intergencommission.org 5

Generational pay progress was the 20 th Century norm… Median real weekly pay by age for each generation: UK (RPIJ- adjusted) RF Intergencommission.org 6

Generational pay progress was the 20 th Century norm… Median real weekly pay by age for each generation: UK (RPIJ-adjusted) RF Intergencommission.org 7

The British home ownership rollercoaster Home ownership rates by age for each generation: UK RF 8 Intergencommission.org

The British home ownership rollercoaster Home ownership rates by age for each generation: UK RF 9 Intergencommission.org

The British home ownership rollercoaster Home ownership rates by age for each generation: UK RF 10 Intergencommission.org

The British home ownership rollercoaster Home ownership rates by age for each generation: UK RF 11 Intergencommission.org

. Stagnation Generation: Exploring intergenerational fairness . LSE Literary Festival February 2017 RF

The recession hit those born in the 1980s hardest Median hourly pay by age, % change 2006-08 to 2013 (%) 20 15.1 15 9.3 10 7.2 5 0 -0.1 0.3 -3.1 -1.7 -0.9 -5 -2.8 -4.6 -6.1 -4.4 -6.2 -4.3 -6.3 -10 -6.6 -9.9 -15 -11.7 -12.7 -13.6 -15.5 -20 -18.3 -20.9 -25 16-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70+ 16-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 MEN WOMEN Source: Labour Force Survey, full-time employees only

Housing costs and benefit cuts compounded this Change in median income after housing costs by age, 2007/8-2012/3 (%) 5% 2.6% 0% -0.2% -1.6% -2.5% -2.8% -5% -4.6% -6.5% -6.4% -7.3% -7.6% -10% -7.9% -10.9% -11.9% -12.7% -15% -15.1% -17.9% -20% -19.7% -25% Source: CASE/DWP analysis of HBAI dataset

Austerity hit the young harder than the old Protected: Protected: - NHS Higher tax allowances Protected: - State pensions Schools (better for some) - Winter fuel etc. Cuts: - Working age benefits Cuts: Cuts: (CPI/ limits on totals/ 3 - Child Benefit - Local Authority years of real cuts) - Allowances for care for elderly - Disability benefits staying at - Age allowance - Housing Benefit school in income tax - Council Tax Benefit - Youth provision - Higher pension - Tax credits age (but - Student loan longevity) repayments

But it may still all come out OK in the end? Projected lifetime receipts from health, education and social security, and taxes paid towards them by five year age cohort, 1901-2051, GB Incomplete lifetimes 1971 (to 80) 1966 (to 85) 1961 (to 90) Complete lifetimes 1956 1951 1946 1941 Tax 1936 Receipts 1931 1926 1921 1916 1911 1906 1901 0 5 10 15 20 25 Cumulative totals in years of GDP per capita

The big issue is now wealth differences by age? Household wealth by age, £, 2010-12 450000 400000 350000 300000 250000 200000 Median 150000 100000 50000 0 16-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Age

The big issue is now wealth differences by age – and within age groups? Household wealth by age, £, 2010-12 1600000 1400000 1200000 1000000 P90 800000 P70 Median 600000 P30 400000 P10 200000 0 16-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Age

… which will make (unequal) inheritances far more important than for earlier generations Household wealth by age, £, 2010-12 1600000 1400000 1200000 1000000 P90 800000 P70 Median 600000 P30 400000 P10 200000 0 16-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Age

. Stagnation Generation: Exploring intergenerational fairness . LSE Literary Festival February 2017 RF

Stagnation Generation: Exploring Intergenerational Fairness John Hills Richard Titmuss Professor of Social Policy, LSE Georgia Gould David Willetts Labour Councillor, London Borough of Camden Chair, Resolution Foundation Nona Buckley-Irvine Omar Khan Labour Party activist and former General Secretary of Director, Runnymede LSESU Trust Hosted by the Resolution Foundation and the International Inequalities Institute Hashtag for Twitter users: #LSELitFest