Baby boomers are being courted with financial inducements from both main political parties. Millennials and Gen Z, not so much. Here we assess the intergenerational impact of the election so far.
Pensions
Rishi Sunak has promised to increase the state pension every year by the higher of inflation, earnings or 2.5%, known as the triple lock. In addition, he said a Conservative government would return to the pre-2010 era, when pensioners enjoyed a higher income tax threshold, safeguarding those who live on the state pension from paying tax.
Under this offer, workers eligible for state benefits will pay tax on their payments if they cross the £12,570 threshold, but pensions will be protected from taxation.
Working-age benefits are means-tested, while the state pension is not, allowing even very rich pensioners to claim it.
Investment
Labour has subscribed to the Conservative budget rule that commits the government to reduce debt as a proportion of national annual income (GDP) before the end of the next parliament. This rule is widely considered to limit the level of investment that a government can embark on, and Labour has squeezed plans for investment spending to meet the rule.
Conservative ministers believe that public debt is a burden on future generations. Most economists would disagree, arguing that if debt is used for investment, then the dividends to future generations outweigh the costs.
Housing
Labour has pledged to “rip up” planning rules that prevent developers from building new homes. It has questioned the preservation of green belt land around major conurbations, arguing that there are good reasons to build homes in areas that are currently protected.
Conservative ministers have subscribed to housebuilding targets but failed to meet them over the last decade.
Both parties rely on private sector developers to increase the supply of homes, offering a mix of subsidies and incentives to promote growth. However, private housebuilders are known to regulate supply to maintain high house values, leaving many millennials to pay much higher rent and mortgage costs than previous generations.
Education
Schools budgets are under pressure. A survey published by the Sutton Trust in April found that 46% of all schools in England were cutting back on support staff because of financial difficulties.
Labour will apply VAT to private schools, and schools will receive more money, although the amount is not specified. The shadow education secretary, Bridget Phillipson, has not ruled out increasing university fees and has refused to commit to extra funding for FE colleges. University fees are expected to rise if the Conservatives are re-elected.
The Conservatives have a childcare scheme that started in April and is supposed to ramp up over the next two years. But the National Audit Office recently revealed the Department for Education had assessed the likelihood of being able to deliver the funded childcare places it promised for September 2024 and 2025 as “amber/red problematic”.
Labour is expected to continue the scheme, although the costs of private childcare have rocketed, and for many it is unaffordable despite the subsidy.
