Members of the post-war “baby-boom” generation own almost half of all the personal wealth in the country, a new book has calculated.
People under 45, meanwhile, own little more than a tenth of all property and assets.
According to Pinch, by David Willetts, a Conservative frontbencher, the generation born between 1945 and 1965 have been left with a disproportionate share of the country’s wealth.
In the book, Mr Willetts argues that the post-war generation benefited from an unprecedented combination of benign economic conditions, including rising house prices and high inflation that eroded mortgage debts.
Some of that generation, which amounts to around 17 million people, also enjoyed free university education, jobs for life and final salary pensions.
By contrast, Mr Willetts says, many of the younger generation of workers today struggle to afford their first home, are encumbered by large student debts and face an uncertain situation over their employment and eventual retirement.
He estimates that the total stock of personal property – houses, investments, pensions – in Britain is worth around £6.7 trillion.
Of that, he calculates that the baby boomers’ possessions are worth £3.5 trillion. The over 65s own assets worth £2.3 trillion. But people under 45 own only £900 billion.
Mr Willetts, who was born in 1956, said his book was a call to other members of his generation to do more to share their good fortune with younger people.
«Baby boomers have enoyed an extraodinary concentration of power and wealth,» he told the Daily Telegraph.
«It’s not that baby boomers are bad, but now we need to rise to the challenge of passing that on to the next generation, so that tehy can get started in life, get onto the housing ladder and get a funded pension.»
Some wealth disparities between generations are normal, since people build up wealth over their lives and then start to spend it in retirement.
But in the book, Mr Willetts argues that the baby boomers have amassed an unfairly large share of the national wealth, and that many rules and policies are currently tilted against their children taking a larger share of that wealth.
“The younger generation today has much worse prospects of building up wealth in the same way. The ladder has been pulled up. That is the real injustice,” Mr Willets writes.
“Truly, a young person could be forgiven for believing that the way in which economic and social policy is now conducted is little less than a conspiracy by the middle-aged against the young.”
Mr Willetts describes rising property prices in recent decades as transferring wealth from children to parents.
Older people who bought their houses many years ago have been able to convert equity into spending power, he says. But their children’s generation have been forced to pay more to get onto the property ladder.
“A single generation has had a one-off wealth gain as the price of land shoots up relative to everything else. That one generation is converting this one-off wealth effect into higher consumption,” Mr Willets says.
Instead of cashing in on their historic good fortune and “spending the kids’ inheritance,”, the baby-boomers should do more to honour their “obligations to the next generation”, Mr Willetts says.
Mr Willetts’ book, which will be published next week, does not explicitly suggest policies that a Conservative government should follow.
But it is likely to bolster arguments in favour of measures to address the problems of the younger generation, for example by prioritising public services like schools above funding for long-term care for the elderly.