Tackling the intergenerational divide
A new report by the Resolution Foundation has outlined proposals to help narrow the intergenerational gap between baby boomers, Generation X and Millennials.
Entitled A New Generational Contract: The final report of the Intergenerational Commission, the findings have been broadly welcomed by business groups.
“The idea that each generation should have a better life than the previous one is central to the pursuit of economic growth,” said CBI director-general Carolyn Fairbairn. “The fact that it has broken down for young people should therefore concern us all. Businesses won’t agree with everything contained in this important and independent report, but there is much here that CBI member firms can support, from investing in adult retraining to building new homes.”
Freelance body IPSE has welcomed the report’s focus on issues facing the rising number of self-employed people in the UK. The report points out that young freelancers, in particular, don’t have access to a workplace pension and they are also unlikely to be able to use property to fund their retirement.
It proposes the introduction of an auto-enrolment pension for self-employed people using the Government’s Nest scheme and suggests that tax relief om pension contributions should also be reformed.
At present, pension tax relief is available at the marginal rates of 20%, 40% or 45%, benefitting the highest earners. The Resolution Foundation is calling for a flat tax relief rate, which would help those at the bottom or lower middle end of the earnings distribution.
“The report … confirms what IPSE has been saying for some time: the extraordinary rise of the self-employed since 2000 represents a structural, not cyclical, shift in the UK,” said Chris Bryce, IPSE ceo.
“However, with close to 4.8 million people now choosing to work for themselves, the Government’s training and skills policy is increasingly out of touch with the way people work.
“One of the biggest barriers to self-employed people improving their circumstances is poor access to training. Extending tax relief for training to the self-employed will help younger self-employed people gain skills to enable them to progress in their careers.”