Older generations receiving £150,000 more in ‘welfare dividend’ than millenials, think tank claims

It adds that, as the UK gears up for an election campaign, our main political parties have failed to deal with the nation’s damaging age divides and that age is becoming the dominant divide in British elections.

The analysis shows that people born since 1931 are set to receive a ‘welfare dividend’ over the course of their lives by receiving more support from the welfare state, on average, than they have paid in taxes.

However, the size of this dividend depends on when people were born. The biggest beneficiaries are baby boomers born in the mid-1950s (such as Lord Willetts), who are set for a ‘welfare dividend’ of £291,000 over the course of their lives – paying on average £945,000 worth of tax, and receiving £1,231,000 worth of public services from the welfare state in return.

Lord Willetts, President at the Resolution Foundation, said: “When I first wrote The Pinch ten years ago, I wanted to sound a warning siren that huge intergenerational injustices were opening up across Britain, and that young people were losing out while my generation was doing well.

“Ten years on, those divides have got worse. Young people have been short-changed by a lack of decent pay growth, a lack of decent, affordable homes, and a state that expects them to pay more in order to receive less.

Lord Willetts, a former minister for Universities and Science, claims that the shrinking dividend for millennials, compared to baby boomers, is driven by the small size of the millennial cohort - meaning that there will be fewer millennial taxpayers around to fund the public services enjoyed by the larger baby boomer cohorts.

He added that Boomers’ consumption of health and pensioner benefits will escalate over the coming decade.

Furthermore, he added said that younger generations have been hit by reduced benefit support compared to older generations.

Lord Willetts added: “Britain’s generational divides are affecting our living standards, and how we vote. Our political parties should use the upcoming election to start healing these divides with a policy programme that appeals to and benefits young and old alike.”