Pensioners should "share the pain" of austerity cuts and pay more tax to promote inter-generational fairness in the housing market, a think-tank has said.
The Fabian Society claimed high-levels of home ownership among older people threatens fairness, as middle-income workers' wages stagnate and they cannot afford to buy a home.
More than three-quarters (76%) of pensioners now own homes, compared with just over half (58%) 20 years ago, while the last decade has seen a "dramatic fall" in home ownership among under-45s, the think-tank said.
In 1979, the year Margaret Thatcher came to power, middle-income working age households enjoyed an income 93% above that of middle-income retired households. That figure is now 37%, the study showed.
The society said this had "profound implications" and there should be a "presumption of equality" as "old age is no longer a proxy for poverty". It said: "In public policy and deficit reduction measures, ministers should adopt a presumption of equality across age groups. In financial terms alone, older people are no longer distinct and blanket policies favouring them should be reviewed."
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The society argued that pensioners' taxes should increase, their benefits be cut, and a tax on property wealth should be introduced.
The key policy should be to raise taxes on pensioners so the 27% they pay as a portion of their gross income would rise to 33%, in line with working age households with the same income. This would raise £7.2 billion every year, the society said. But the project should be long-term, to avoid a sharp drop in living standards.
In the meantime, the Government should consider measures such as taxing private pension lump sums, as part of a "grand bargain" that would help fund universal care services.
Specific universal benefits such as the winter fuel allowance - which contributes 3% to middle earning pensioners' incomes - could be re-assessed without threatening the wider principle of universalism, the think-tank said.
The Fabian Society was invited to carry out the research by Hanover, one of the UK's largest providers of old people's housing. The think-tank said it "analysed data to explore the incomes, wealth, housing and social circumstances of older people in the middle - and the implications for public policy and services".
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