Responding to the new proposal to give millennials £10,000 ‘citizen’s inheritance’ to help redistribute wealth to the young Professor Paul Sweeting, financial expert at the University, says this should be ‘based on need’.
‘The proposal from the Resolution Foundation to give 25 year-olds £10,000 recognises a genuine issue. However, this amount is not enough for most – and too much for some.
‘£10,000 sounds like a lot of money, and in many ways it is. It might make a dent in the deposit required to buy a first home, but it would do nothing to help with the ongoing mortgage payments. It would also only just cover a year’s tuition fees for higher education. As such, it would go only part way to putting people in the same position as those who attended university a generation ago.
‘But it is important to remember that not everyone will leave university with debt. In particular, the better off a student’s parents are, the more likely that student is to have fees and expenses covered by his or her parents. Should they then also be getting a £10,000 bonus at age 25? Inter-generational inequality exists, but there is also significant intra-generation inequality – and this is true for both young and old.
‘This suggests to me that any money given to the young should be given at least partly on the basis of need, and collected according to similar principles.’
Prof Paul Sweeting
Paul Sweeting is Professor of Actuarial Science within the University’s School of Mathematics, Statistics and Actuarial Science, having held a number of roles in pensions, insurance, and investment. He was responsible for developing the longevity reinsurance strategy for Munich Reinsurance, before which he was Director of Research at Fidelity Investments’ Retirement Institute.
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