Perspectives: Are baby boomers to blame for the hardships of younger generations?
Are baby boomers to blame for the hardships of younger generations?
As part of the Perspectives series, BBC Religion and Ethics asked two contributors to BBC One's religious debate programme The Big Questions to develop some of the issues.
Angus Hanton is a self-confessed baby boomer and co-founder of the Intergenerational Foundation, an independent think-tank that focuses on intergenerational fairness in the UK.
Vanessa Burholt is Professor of Gerontology and Director of the Centre for Innovative Ageing (CIA) in the College of Human and Health Sciences at Swansea University.
Angus: My concern is that the baby boomers as a whole will be taking out much more, in financial terms, than they will have put in. They have, as a group, gained from house price windfalls at the expense of younger generations, have written themselves unfunded pension promises that will have to be paid for by younger and future taxpayers and, on top of this, the tax system is heavily stacked in their favour.
By this I mean that earned income is taxed very highly (especially for those with student loans!) whereas unearned income and assets are largely untaxed - yet it is the baby boomers who mostly hold the assets and get the unearned income.
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In "Ready for Ageing?", a recent House of Lords report, it is predicted that NHS costs will spiral upwards by 2030, increasing by 50% in real terms, mostly because of increasing numbers of people with chronic conditions such as diabetes and heart ailments. The number of Alzheimer sufferers will increase by 80%.
Who bears these costs is, as that report acknowledged, an intergenerational challenge and it looks as if the younger generation will be asked to pay a disproportionate share of these costs through various taxes on their earned income - unless something changes radically.
Vanessa: Portraying the older population as contributing to an 'economic disaster' that the younger generation is going to have to 'pay for' is shameful, and plays a role in the instigation of intergenerational conflict and prejudice.
End Quote Angus Hanton Co-founder of the Intergenerational Foundation
Whilst older people should not feel guilty individually, there has been a collective selfishness over resources which is damaging our younger people”
The population of 'baby boomers' that you refer to (those born between 1945 and 54, and then those born between 1960 and 64) comprise people who have already retired, long-term unemployed, carers, and those still in employment. As well as considerable differences in the characteristics of wave 1 and 2 'baby boomers' there are considerable 'within cohort' differences that impact on the health and wealth of the cohort [age group].
For example differences between men and women, ethnic groups, socio-economic status, and advantaged or disadvantaged areas of the UK. The same diversity that is also apparent in younger cohorts.
Older people who have retired are contributing to society as consumers; they are the linchpin of the voluntary sector; providers of care and support to parents, children and grandparents; and as recipients of care and support - underpinning a health and care service sector that is a major employer.
Moreover, those older people who are able to lead financially independent lives after retirement may yet transform your view of dependency on the state to provide support.
Most importantly, the global economic failure that is impacting on all ages has its roots in poor banking regulation/oversight and cannot be blamed on one age cohort, but instead on short-termism by our political leaders.
Angus: Your analysis does not consider at all the plight of those under 30. To suggest that their deepening crisis of housing and impoverishment is separate from the increasing wealth and income of the older generation is simply naive. A series of studies done by the Intergenerational Foundation shows that over the last 15 years the under 30s have had to cut their spending sharply in every category while the over 60s have significantly boosted their spending on holidays, cars, eating out and other luxuries.
Kids v codgers
Watch a team of young 'hoodies' take on a group of old 'codgers' in a hill race, with the Top Gear team using the stereotyped language of the media to describe them.
Critically your response fails to quantify the extent to which the older generation has, over the last 20-30 years, built up claims which are unmatched by assets to pay them: the UK now has unfunded pension liabilities of over £5 trillion which equates to £190,000 for each UK household. On top of this we have a huge national debt of over a trillion pounds that is still rising and represents a burden on the young and unborn, and yet we have a tax system that taxes older generations very lightly.
Whilst older people should not feel guilty individually, there has been a collective selfishness over resources which is damaging our younger people. Despite this, young people are being asked to pay for our medical and social care as well as making sacrificial transfers to us to pay for their housing and to pay for our pensions.
We absolutely do not want to divert attention from political shortcomings - we want our leaders to recognise intergenerational injustice, and act to make things fairer for younger generations.
Vanessa: Many older people have limited resources, because of poor health, or exit from the labour force before retirement. These older people are not 'significantly boosting their spending on holidays, car, eating out and other luxuries', and to portray them as such is ignoring the 'plight' of older people.
Research by members of the Centre for Innovative Ageing has shown that whereas younger generations may move in and out of poverty, older people (especially those with poor health) are likely to have exited from the labour market, and therefore are less able to change or control their financial situation in later life.
My suggestion has been that in order to change society into one that is fit for all ages, we should focus on the shortcomings of political decisions concerning affordable housing, economic development, and poor financial control of the banking sector.
Angus: Researchers for the Intergenerational Foundation have calculated that there are about a million people over 65 who live in households with over a million pounds of assets. These wealthier older people are given a range of handouts which are paid for by the state including the winter fuel allowance, the state pension, free bus passes, etc.
It is a fantasy to imply, as you do, that different generations do not have some conflicting financial interests - it is the job of government to reconcile these different interests fairly.
End Quote Vanessa Burholt Director of the Centre for Innovative Ageing
The focus on generational differences has illustrated that ageism and age prejudice are still part of the acceptable discourse in the UK today”
Contrary to popular stereotypes, older people are no longer more likely to be living in poverty than members of younger generations: according to the Department for Work and Pensions, in 2010/11 only 14% of pensioners lived in households that have an income which equates, after housing costs, to less than 60% of median income (amounting to 1.7 million people).
Pensioner numbers in this poorer category have thankfully been falling - by about 15% over the last 12 years or so. By contrast, 21% of working-age adults live in households which have an income of less than 60% of median income (amounting to 5.5 million people).
There were also 3.6 million children (27% of their age group) who fall into this much poorer category.
Based on this measure, it would appear that retired households, as a cohort, experience the least difficulty with below-average incomes, yet they are given substantial income support in the form of the state pension and universal benefits, which is not available to younger people.
Here are three solutions which will help both the old and the young:
- Help with downsizing. Where older people actually want to downsize to a smaller home, the government could encourage the building of suitable properties, by giving advice and support and by not charging stamp duty for such "downsizers";
- The government could reduce tuition fees and make student loans cheaper. At the moment they charge 6.6% interest on student loans and charges students the full cost of tuition (typically £9,000 each year). Interest rates and fees could be lower which would help the younger generation;
- The UK Treasury could shift the burden of taxation away from earned income and onto unearned income and assets so that those who are working, including the young and those over 65, would be able to keep more of their earnings.
It is up to us as voters to elect politicians who are more long-term in their thinking and who do not favour some age cohorts over others and are not swayed by the power of the "grey vote".
Vanessa: Your definition of wealth of course includes housing assets and total pension value and is once again 'spun' to suggest a 'problem generation' rather than focusing on inequalities within cohorts, regional inequalities and health inequalities.
A report by the LSE indicates that the alarming thing about 1 in 10 millionaires in the UK is that at the opposite end of the scale there are people who have a total net worth of less than £12,600. Many younger people who have not yet had the chance to earn or accumulate assets will move out of this position over time. However, people with low assets are found in all ranges. For those people aged 55-65, 10 per cent have fewer than £29,000 of assets and will be unable to contribute to a private pension that will improve their situation in later life.
Post-retirement, those with low assets will need to be able to access a welfare system that will provide a decent standard of living in later life without feeling as if they are begging for help.
I mention the latter, because your subjective reference to welfare benefits as 'handouts' is a common media ploy to generate images of dependency and stigmatize the receipt of welfare support. In this respect, your language only serves to support an argument for universal support policies (not means tested) so that we avoid the situation where benefits go unclaimed because of the stigmatization of claiming them.
According to the DWP, older households experience the most difficulty making ends meet: 29% of one person households over 60 years are in fuel poverty (that is, spending more than 10% of their income on heating their home) compared to 7% of households with a couple and dependent children. We know that 1.5 million older people who are entitled to pension credit do not claim this mean-tested allowance (worth £2.8 billion) and exist on a level of income well below the poverty line.
Other overtly ageist assumptions are included in your 'solutions'. With regard to housing, your comment on help with downsizing is clearly ageist: why should relocation support be focused on older populations? This suggests that you are not so concerned with 'help' to relocate - which would be useful at all ages - but instead you are attempting to provide enough negative media discourse to pressurize older people into feeling that they should move from their homes.
The focus on generational differences has illustrated that ageism and age prejudice are still part of the acceptable discourse in the UK today.
Instigating generational conflict is far less productive than focusing on generational similarities: inequalities in access to resources, regional health inequalities, and the subsequent exclusion from the realms of the social world which many take for granted.
Perspectives is a forum for invited contributors to write about personal and contemporary issues of faith and ethics. The views expressed here are those of the individual authors, not the BBC.