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Welcome to IF’s summer 2015 newsletter – a short update on our work protecting the interests of younger and future generations in British policy-making.

 

Summer Budget

Once again younger generations have been targeted in a budget that continues to protect the affluent old at the expense of the young. According to The Guardian, “Austerity, it seems, is predominantly a young person’s game”, while The Telegraph described “the widening chasm between old and young”.


The political ideology that drove the budget appears to have no sympathy for the many young people who may be unable to remain in the family home beyond school age. Gone is the safety net of housing benefit for the under-21s. For young people who lose their jobs, gone too is Jobseeker’s Allowance after six months out of work.


University students will also feel the pain with tuition fees rises now linked to inflation. A freeze on the student loan repayment threshold will also mean that, as wages rise, more graduates, past, present and future, will be dragged into the repayment net.

 

This level of intergenerational inequity is unprecedented and IF is working to ensure that empirical evidence exists that quantifies the glaring imbalance so apparent.

 

Donate Here

Protecting the interests of younger and future generations costs money. With your help, IF can continue to conduct vital research into the plight of younger and future generations. A regular monthly donation, or one-off gift, can help IF to do more and ensure our work is distributed to the widest possible audience.

 

IF in the News

IF has had a bumper quarter of media comment. Follow this link to read recent coverage. Highlights include a front page splash in The Observer for IF’s 2015 UK Intergenerational Fairness Index, and Angus Hanton’s excellent buy-to-let (BTL) discussion on BBC Radio Four’s flagship personal finance programme, Moneybox Live.

 

IF in The House

Long-time supporter of votes@16, Lord Tyler, quoted IF’s work on the current democratic deficit in his speech calling for an amendment to the Wales Bill. His speech led to the Lords voting 221 to 154 in favour of including an amendment to allow 16 and 17 year olds to vote in council elections and referenda.

However, there is still much to do to persuade the Prime Minister to change his position against lowering the voting age in both general elections and the forthcoming EU referendum.

 

Research Papers

IF is keen to help young academics, aspiring think tankers or those with an interest in a career in social policy to get published. If you have an idea for a newsworthy research paper that tackles intergenerational fairness in housing, health, employment, pensions, taxation, education or the environment, you could get paid to write it! Please contact research@if.org.uk.

 

Media Requests

IF is always keen to hear from young people struggling with living costs and student debt as well as from concerned parents and grandparents. Please email liz@if.org.uk if you would like more information on how to get involved.

 

IF’s Summer Budget Triple Win!

IF has long called for taxation reform in order to level the playing field between first-time buyers and buy-to-let (BTL) investors, as well as to discourage older generations from continuing to use housing as an investment vehicle during an affordability crisis. BTL lending has risen exponentially over the last 10 years and currently accounts for 15% of all mortgages taken out.


IF therefore welcomed the Chancellor’s Summer Budget announcement on the restriction of mortgage interest payments tax relief to the basic rate of income tax as a means of discouraging such investment. The tax relief amounted to a taxpayer-funded £5 billion annual subsidy in 2013.


IF’s second policy recommendation to be taken up was the announcement that the 10% wear and tear allowance given to landlords, regardless of whether they spend anything on furnishings in their property or not, would be replaced by a new system that gives tax relief only on proof of furnishings expenditure.


The final IF recommendation to increase the Rent-A-Room Allowance was also taken up by the Chancellor. While a new tax-free income ceiling of £7,500 is welcome, IF believes raising the limit to be in line with the Nationwide House Price Index would have led to a more realistic £10,200 tax-free ceiling and therefore make sharing one’s home more attractive.


Achieve Savings Fairly


With the Chancellor calling for ideas on how to make savings that are intergenerationally fair, IF has produced a number of policy papers:
Harmonise free prescriptions (currently starting at 60 years of age) with the State Pension Age (SPA) and save £1.6 billion between 2015 and 2020.
Abolish Winter Fuel Payments for new claimants and save £1 billion between 2015 and 2020.
Raise £2 billion annually by introducing NICs to the 1.4 million workers above state pension age who are exempt from NICs by sheer fluke of age.


If you would like to be sent a copy of the above policy papers please email liz@if.org.uk.

 

IF Research

Key research published this quarter includes Should Young People Look North?, an analysis of rental costs versus graduate pay.

 

The findings revealed that graduates might do better by moving North to Manchester, Leeds, Liverpool, Newcastle or Sheffield, where housing is cheaper and graduate jobs are still plentiful. London on the other hand, while full of opportunity, has such unaffordable housing costs that any wage premium likely to be gained from working in the Capital is more than eroded.


In July, IF published the 2015 UK Intergenerational Fairness Index, an annual report quantifying the level of intergenerational unfairness present in the UK. For the thirteenth year in a row young people have been disadvantaged compared to older generations, with a 10% decline identified since 2010 alone.

 

Key drivers include the increasing government debt at £1.4 trillion in 2013/14, median house price rises of 5.4% against median annual income increases for 22–29 year olds of just 1.5%, the outstanding liability of public sector pensions at £1.2 trillion, the fall in spend on education as a proportion of GDP at 5.28% in 2013, and the first decline in higher education participation since 2003/04 – dropping by 7% between 2011/12 and 2012/13 alone.

 
 

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