Baby boomers take out more than they put in, claims study
SUCCESSIVE GENERATIONS have received more from Britain’s welfare system than they have paid in – with baby boomers seen as major “welfare winners”, according to a think-tank.
The Resolution Foundation said a serious debate was needed as to how the welfare state should be funded in a sustainable way.
Baby boomers born between 1946 and 1966 are set to receive more than 20 per cent more in support than they will have contributed in taxes over the course of their lives, the report said.
This calculation assumes that the costs of paying for health and pension benefits in retirement are largely met by the generations below.
By contrast, the generation above baby boomers are projected to receive about five per cent more than they paid in over their lives.
Known as the silent generation, the older generation born between 1926 and 1945 have become the biggest net contributors to the system, having started paying their taxes around the time the modern welfare state was created, the foundation said.
It added that the prospects for later generations are uncertain, with bigger long-term questions about how the welfare state is maintained. The foundation said pressures on welfare spending will grow sharply from the early 2020s onwards as more of the large generation of baby boomers reach retirement and start to draw more heavily on the welfare state.
The report for the foundation’s ongoing Intergenerational Commission looked at what people put in and take out from the welfare state over their lifetime. By examining past, present and projected taxes and education, health and social security receipts, it estimated the net contributions of different generations.
The evolving nature of the welfare state, tax revenue changes and changes in society mean some age groups have benefited more than others, it said.
David Finch, the chief analyst at the foundation, said: “From starting school and seeing the deductions in your first pay cheque to collecting your pension, people’s experience of the welfare state goes through several phases during their lives, with the NHS with them throughout.”