Give millennials £10K?

Would a financial boost help close the generation gap?

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Should millennials be given £10,000 each?

By Joe Harker

Giving everyone £10,000 when they turn 25 is a drastic move but a think tank suggests that's exactly what the government should do.

The Resolution Foundation conducted a two-year study on ways to bridge the generational gap and back the idea of "citizen's inheritance" to redistribute wealth and help a generation that needs financial assistance.

Millennials spend three times more on housing than their grandparents did but live in poorer quality accommodation. It makes it difficult to build up savings and move onto the property ladder.

A young family would take on average 19 years to save up a deposit for a home compared to just three years from the previous generation. Stuck renting and unable to build up the savings, it'll take more than ditching the avocados to get a home of their own.

Getting £10,000 sounds like a fantastic thing to happen but iNews has suggested that the money wouldn't go as far as hoped. Whilst it could be used for getting on the housing ladder or starting a business, it would have to bolster existing savings.

The average first year costs for a new business come at £23,000. The average deposit for a house in the UK is 17 per cent and the average house price is £225,047, making the cost of a deposit just under £40,000. The money would soon be gone in both cases and need to be combined with a healthy amount of savings.

Writing in The Guardian, Gaby Hinsliff argues that the "citizen's inheritance" is a short-sighted measure. Not only is it highly unlikely to happen, it would also distract from what could be a more important issue. Hinsliff believes reforming inheritance tax would do more to help instead of handing out a lump sum of cash.

Changing the way inheritance tax works would affect future generations to come, albeit in a less obvious way than handing out £10,000. If the government hands everyone a chunk of money and says "go buy a house" then don't be surprised if house prices suddenly increase by several thousand.

The Independent calls the idea "gimmicky" and easily open to criticism. It is the sort of idea that will generate a lot of opposition and can be picked apart. Not every millennial really needs £10,000 and not every member of older generations is so flush with cash that they could do without. They suggest that in some cases the money could end up causing more resentment.

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Report: Give millennials £10k to fix generation gap

Is this a good idea? A bold new report has urged the government to give all 25-year-olds £10,000. It says the cash will help young people buy homes, learn new skills and start businesses.

In 1953 in Britain - the year of Queen Elizabeth II's coronation and James Bond's first appearance in print - a young family could buy a house for just £1,891. According to 2018's most recent figures, the average house price is now more than £220,000 (rising to over £430,000 in London).

Yet astronomical house prices are just one factor in the "broken" social contract between home-owning baby boomers and millennials struggling with sluggish wages and an inaccessible housing market.

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