NARPO – The voice of retired police officers
NARPO – The voice of retired police officers


The intergenerational contract is an important feature of a well-functioning society. In practice, it means that the experience of each generation should be fair, whether it be access to care, career opportunities, benefits, pensions or a place to call home.

The comparative experiences of two generations – the baby boomers (born 1946 – 65) and millennials (born 1981 – 2000) – have been subject to much scrutiny in recent years, with many questioning whether generational fairness has been breached, and if so, how to best address it.

The Intergenerational Commission’s report A New Generational Contract is the result of a two-year study conducted by a group of leading experts. The report provides a comprehensive and in-depth analysis of the intergenerational challenges the country faces, examining areas such as employment, housing and pensions, and sets out a policy programme to tackle them.

Amongst the recommendations, it proposes a new progressive property tax to address gaps in social care funding and a new NHS levy on National Insurance contributions.

NARPO, working alongside its Later Life Ambitions partners, welcomes the attention that is being paid to ameliorating the disparities in the fortunes between generations. Baby boomers do recognise that much has changed in the past 50 years – from work & wages, the housing market, pensions and the NHS.

It is important to remember, however, that not all pensioners live the wealthy, comfortable life that is often depicted in the media. In fact, there are approximately 1.9 million pensioners living in poverty.

The Intergenerational Commission says that the Government should make earnings of those above State Pension age subject to National Insurance Contributions (NICs) to fund an NHS levy to raise £2.3bn

The report also recommends that NICs should be paid on occupational pension income. We are concerned that this proposal fails to recognise that paying NICs on private or occupational income is effectively a double taxation. This is because NICs are taken from gross earnings before tax and pensions contributions are deducted, meaning that individuals will have already paid NICs on from their pension pots.

Furthermore, the report fails to recognise that the same pensioners will already be paying for or contributing towards their ‘social care cost’ as their incomes will exceed the thresholds currently in place for local authority support.

The focus on inheritance may also be misleading. The report states that: “Inheritances are set to play a bigger role in determining who holds assets, and therefore in what living standards look like for different members of younger generations.” This may not be the case for all pensioners – unless the funding of social care is addressed, it is likely that any potential inheritance is locked in property, which the local authority may eventually claim to cover costs.

Later Life Ambitions will be providing more detailed comments on the recommendations in A New Generational Contract in due course.

Please click here to read  A-New-Generational-Contract-Full-PDF