When I was 15, I started working every Saturday at my local butcher in Liverpool.
I’d put on my red-and-white striped apron at 8am and spend the day washing and clearing up, to the point where the skin on my hands began to crack. For this I was paid £20 cash in hand.
It wasn’t until I got my first proper pay cheque at 18 that I paid any tax.
The scale of the deductions soon came as a shock.
By the time I completed my degree at King’s College London in 2022, I’d saddled myself with a whopping £45,000 of debt. Today it’s risen to – let me check – £57,592.72, with about £163 in interest being added every month.
Was my degree money well spent? Statistically it won’t have been. King’s may be the fifth-best university in Britain, according to the rankings, but a typical graduate pays an effective marginal tax rate of 37 per cent, almost double the 20 per cent rate most working adults pay.
Graduates who become higher-rate taxpayers on £50,000 are in an even worse position. They face a marginal tax rate of 51 per cent, while some with a postgraduate degree hand over 57 per cent – often even more if they have children. And that’s before Rachel Reeves’s Budget next week.
So who benefits from all this legal larceny? The nation’s baby boomers, of course: the richest age group in Britain.
‘Giving in to the 3.6 million or so Waspi women would cost up to £10.5 billion and, as this sum would be borne by taxpayers’
One in four of them are millionaires and many of them live mortgage-free – yet still they enjoy seemingly endless unaffordable perks and freebies thanks to working taxpayers.
Last week, the Government raised the spectre of another bumper payout to the retirement class by announcing that it will reconsider the decision to refuse payments to the millions of ‘Waspi’ women who feel short-changed by the equalising of the retirement age between 2010 and 2018.
Women Against State Pension Inequality (Waspi) was launched in 2015 to campaign for ‘compensation’ on the basis that the reform, first announced in long-ago 1993 and followed up with an extensive campaign on the news, the radio and TV as well as in popular conversation – was somehow not communicated effectively.
Giving in to the 3.6 million or so Waspi women would cost up to £10.5 billion and, as this sum would be borne by taxpayers, it would represent yet another enormous transfer of wealth from workers to retirees – that is, from the young to the old.
Of course the social contract demands that those older people who have paid taxes all their lives deserve to retire in comfort. It is inevitable, too, that those of working age should pay the bulk of taxes that help to fund the state.
But many baby boomers expect to enjoy long retirements, some lasting decades, while being supported by their children and grandchildren’s generations – just as those younger people are bled dry.
No wonder so many ambitious twenty-somethings are leaving the country to start new lives abroad.
Frankly, the news keeps getting worse for young people. Under Keir Starmer’s Government, students who enrolled last year will be hit by a lowering of the salary threshold before they begin repaying their loans – from almost £33,000 to just £25,000 a year.
This means new graduates even on minimum wage will start repaying.
I accept that plenty of the Waspi Women did not attend university, but it’s worth remembering that those who did (like the rest of the boomers and subsequent Generation X) were not only spared tuition fees, but the government even gave them generous maintenance grants to cover their living costs – a perk stopped by New Labour in 1998.
Thanks to the ruinous interest rates on student loans, however, many of today’s under-30s can expect to be paying for their education for the rest of their working lives – while also spending their formative adult years generously funding the boomers’ retirements.
Under the ‘triple lock’, which increases the state pension by the highest of three figures – the annual increase in average earnings, annual inflation or 2.5 per cent – the value of the state pension has soared much faster than the average wage.
Between 2010 and 2023, the state pension increased by about 60 per cent in cash terms, while prices rose 42 per cent. Average earnings, however, rose by only 40 per cent. By 2022, the state pension was worth almost 25 per cent of average full-time earnings, the highest level since 1980.
‘Graduates who become higher-rate taxpayers on £50,000 are in an even worse position. They face a marginal tax rate of 51 per cent, while some with a postgraduate degree hand over 57 per cent – often even more if they have children. And that’s before Rachel Reeves’s Budget next week. Pictured: The Chancellor yesterday
It’s no exaggeration to say that the triple lock will eventually bankrupt the country unless it is reined in.
With the state pension set to cost £15.5 billion a year by 2030, many young people are paying for a benefit that a third of them expect won’t exist by the time they retire, according to a 2022 survey by insurers Royal London. (Fully half of them – rightly, I’m sure – expect it to be less generous.)
Or take the boomers’ other perks: anyone of state pension age, regardless of whether or not they are millionaires, also gets ‘free’ travel passes – or to put it another way, working young people are forced to pay their fares for them.
In London, these are offered at the age of 60, a freebie that costs taxpayers around £700 million annually.
Pensioners also get free prescriptions, regardless of whether or not they could easily afford them.
Young taxpayers simply cannot afford to support this level of generational unfairness when the cards are already so stacked against them.
The reality is between 2008 and 2022, the share of national wealth held by the over-60s leapt from 39 per cent to 49 per cent, according to the Left-wing Resolution Foundation think-tank.
The ‘wealth gap’ between millennials in their early 30s – the age when many would like to raise a family – and boomers (born 1946-1964) doubled over the same period.
Most pensioners’ wealth is tied to (unearned) rising property prices. In 2023, the average house price was 8.6 times the average annual disposable household income – almost double the figure of 4.4 times in 1999. And prices aren’t about to fall any time soon.
More than 16 million immigrants have arrived in this country since 1997, exacerbating a housing crisis which successive governments have failed to ease, each missing their house-building targets. All of which only makes rents and property prices more expensive.
No wonder so many young people are increasingly attracted by parties offering radical change, such as the ultra-Left Greens, or the Right-wing Reform UK.
A new poll from the market research consultancy Savanta shows that the Greens now have the support of 32 per cent of 18 to 25-year-olds, while Reform’s share of this demographic has grown to 20 per cent. I firmly believe that the reheated Communism of the Greens would only further impoverish young people – and everyone else, for that matter. But we should not be surprised that so many are looking to this extreme alternative.
Young people have every right to be angry. If we want to create a better country for them, we must acknowledge that taxes are too high, the state is spending too much, more homes need to be built – and the pampered Waspi Women don’t deserve a penny more.
