Life is unfair for young people - while the elderly have it too good.

That’s the verdict of an inquiry by the House of Lords.

In a new report, members of the Lords call for a dramatic shift in resources from the old to the young.

Taxes would go up for some elderly people and generous pension increases would no longer be guaranteed.

The money saved would be spent on things like education and training, and ensuring there are more homes for people of all ages.

It may come as something of a surprise, because members of the House of Lords tend to be on the elderly side.

The average age of a lord is 69. And the report's authors include Baroness Crawley of Edgbaston, a former West Midlands MEP, who is 69 years old herself.

But the evidence is indisputable, according to their report.

And the problem is only going to grow, as lifespans of 100 years or more become commonplace.

The problems they highlight include:

  • Many younger people are struggling to secure affordable housing

  • Younger people are let down by an education and training system that doesn’t prepare them for a rapidly-changing world of work

  • Pay is going up more slowly than in the past

  • Young people are likely to find themselves in insecure employment, without the legal rights and protection that come from being officially classed as a worker

  • Successive governments have failed to prepare for the cost of social care for the baby-boomer generation born after Word War II. It means that younger people are going to have to pay for them

  • Retired people now have higher incomes on average than many younger groups

The findings are published in a report by the House of Lords Select Committee on Intergenerational Fairness and Provision.

It warns: "Intergenerational fairness is an increasingly pressing concern for both policy makers and the public.

"It is exacerbated by an ageing population, the global financial crisis and successive government policies that have failed to consider generational issues.

"We believe the issue of intergenerational fairness needs to be addressed."

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What’s the answer? The Lords have put forward a number of ideas.

They include ending the “triple lock” on state pensions. At the moment, this means that the state pension increases each year by either UK wage growth, inflation, or 2.5%, whichever is higher.

So when wage growth is very low - which has been the case in recent years - there’s a good chance that pensions will increase by a higher rate than wages.

The Lords say that pensions should simply increase each year at the same rate as average earnings for working people.

In practice it would mean that in some years, pensions don't rise by quite as much as they do now.

 

They also want people who continue to work once they reach state pension age to pay National Insurance.

At the moment, a younger person earning £30,000-a-year can expect to pay around £2,564 each year in National Insurance. But if you keep working after the age at which you can claim your pension (currently between 65 and 66) then you pay no National Insurance at all.

The Lords proposal would mean working pensioners are taxed at the same rate as everyone else.

They also want to end the policy of giving everyone a free TV licence (worth £154.50) at the age of 75. The policy could be scrapped entirely or limited to pensioners on low incomes.

Free bus passes and the winter fuel payment, worth up to £300 a year, should be limited to people at least 5 years above state pension age, the Lords say.

And the Government should publish data on the incomes and levels of wealth held by different generations, and how people of different ages will be affected by major spending or tax decisions.

Do pensioners get too many benefits?
Do pensioners get too many benefits?

That last one may sound a bit nebulous but in the long run it could be the most significant. No government wants to admit publicly that it is making young people poorer.

If older people are going to pay more tax, and get a bit less in benefits, where will the money go?

The Lords suggest substantially increasing funding for further education and vocational training.

They also want local councils to develop unused land  for housing, and to have planning policies to meet the housing needs of younger people as well as older people.

New laws should ensure tenants in private housing are treated fairly, the Lords say.

 

And everyone who is employed in some way should have the legal status of a worker, with the rights that brings.

The Committee was chaired by Lord True, a former council leader in London who worked as an adviser to Norman Fowler, the former MP for Sutton Coldfield.

He said: “We are calling for some of the outdated benefits based purely on age to be removed.

“Policies such as the State Pension triple lock and free TV licences for over 75s were justified when pensioner households were at the bottom of the income scale but that is no longer the case.”