Tory government’s ‘tax by stealth’ will hit under-30s on low wages hardest
The spiralling cost of living will have a “crippling” impact on young people, experts have warned, as a new report found that under-30s are disproportionately being forced to bear the brunt of the costs of social care reform and Covid.
Research by the Intergenerational Foundation thinktank, to be published on Monday, claims that younger workers are being unfairly targeted by the government in a “tax by stealth” caused by freezes on income tax brackets and the student loan repayment threshold,as well as April’s national insurance rise.
Low-earning young people will be hit hardest by the changes, claims the report, having a significant impact on their take home pay, disposable income and potential to save for housing and pensions.
Researchers calculate a graduate earning £27,000 a year will see their deductions rise by about 20% over the next four years – from 18% of their pay to 22%. They predict their disposable income will drop by almost 30%.
They calculate that younger workers will pay more than 10 times more in national insurance contributions each year than workers aged 65-plus.
Labelling under-30s the “packhorse generation”, the thinktank claims they are being targeted by the government, which it says is using high inflation to pull more low-income, and especially younger, workers into taxation sooner.
Angus Hanton, co-founder of the Intergenerational Foundation, said the policies will have a “crippling” impact on young peoples’ lives.
“Our figures suggest many young graduates will see about a 30% drop in their disposable income within the next four years. So it’s really going to bite. And that’s before you take into account probably a 50% energy bill hike in April,” he said.
“It will hit young people harder than older
Read more on theguardian.com
