Britain’s financial future needs catch-up plan for young workers
If lockdowns have taught us anything, it’s not to underestimate the power of a holiday. Two weeks on the beach feels like a valuable reward after two years of mentally draining restrictions.
It is not surprising that travel companies are reporting an uptick in the booking of ‘big’ holidays. Part of that, of course, is the financial bonus of lockdown.
For some, the restrictions on eating out or the sudden windfall of unspent nursery fees has been a helpful fillip indeed to the bank balance. If you own a house, which has soared in value over the past year, then all the better.
The pandemic has strained every sinew of our society, but the quiet truth is that for a lot of people it’s been a financial reset. No wonder two weeks in Antigua looks appealing.
But not all have experienced the same boon – particularly, in London and the south east at least, those that don’t own a home.
They tend to be younger, more likely to have been furloughed, and will have missed a couple of years of up-close-and-personal opportunities to learn and kick on in their careers.
Owning a home has become more difficult; as values soar, the deposit required to get on the housing ladder has gone up. In short: they’ve fallen behind.
The Treasury and senior government ministers do seem to realise this – and privately acknowledge that most of it is the result of pandemic restrictions designed to protect the health of those significantly further up the age range.
So two options present themselves: a punitive transfer of wealth, or pro-enterprise, pro-growth reforms. We prefer the latter.
Two immediate solutions present themselves: inserting some energy back into the government’s planning reforms, and a careful look at what the tax system could do to support younger Brits.
Rishi Sunak spoke in a podcast this weekend of being agile and embracing new thinking: could tax bands be lower for younger workers? Whatever the answer, a catch-up strategy should be on the agenda.