Alex Morton is Research Director for Housing, Planning and Urban Policy at Policy Exchange.
Today, Policy Exchange publishes a new report, Housing and Intergenerational Fairness, looking at the best way to house Britain’s ageing population and contrasting it with a report out by the Fabians arguing for higher taxes on property.
Housing and other costs can place an unsustainable burden on young people. There are a host of what might be termed ‘inter-generational’ issues. The numbers of older people have risen, and will continue to rise steadily. Numbers of over 60s in the UK will nearly quadruple between 1951 and 2030. The biggest rise over the next few decades will be amongst the very oldest. From 2010 to 2030 the absolute number of those over 74 is projected to rise 73% from 7.4 million to 12.8 million. The numbers of those over 84 will more than double from 2.9 million to over 5.8 million.
People living longer is a great thing. But it has a downside. The Office for Budgetary Responsibility has produced working assumptions about the costs this will create. They estimate with 2.2% economic growth a year over the coming decades, this will require annual expenditure worth around 5% of GDP. This will largely be borne by the young. If the economy grows at a slower pace the cost as a share of national wealth will be even higher.