Monday 23 September 2019

A leading think tank proposes that every Millennial receive an €11K lump sum at 25 years - but is this a good idea?

Columnist Katie Byrne discusses the possibility of a so-called 'citizen’s inheritance' for Millennials

Millennials (stock photo)
Millennials (stock photo)
Katie Byrne

Katie Byrne

Millennials don’t get it easy. They’ve been maligned as the ‘Snowflake Generation’; criticised for their apparent lack of workplace nous and blamed for destroying everything from bricks-and-mortar retail to dinner dates and cursive writing.

Their prospects aren’t much better. Permanent pensionable jobs are disappearing, wages are stagnating and getting on the first rung of the property ladder is beginning to feel like a pipe dream.

It all sets the scene for a frightening financial future, says the Resolution Foundation, a British think tank that has researched the challenges facing millennials for the last two years.

In fact, the future looks so bleak for millennials that the leading think tank has proposed a radical redistribution of wealth that would see every Briton receiving a lump sum of £10,000 when they turn 25.

The so-called ‘citizen’s inheritance’ would be funded by a change to the inheritance tax allowance, and it would potentially bridge the inequality gap between millennials and baby boomers.

“Younger generations are bearing more risks and holding fewer assets than their predecessors,” states the report. “We need to redress that imbalance if we are to maintain the promise of an asset-owning democracy.”

In theory, the lump sum could be used to pay for housing, further education or starting a business. In reality, it could also be used to pay for long-haul holidays, breast implants and dodgy cryptocurrency.

This isn’t to say that millennials are financially irresponsible by nature — although you’ll probably find someone, somewhere, levelling this particular criticism at them.

Rather, it’s to say that lump sums aren’t always spent wisely — irrespective of a person’s age. We’ve all seen what happens when a flahulach type gets his hands on an inheritance. Likewise, we’ve all seen people act like Elton John in a jewellery shop when they finally receive a redundancy payoff.

In other words, while some cute hoors would use the £10,000 to boost the £10,000 they have already saved for a house deposit, others would use the lump sum to clear their credit card bill (before reactivating the plastic for a trip to Ibiza).

You could argue this is just human nature: some people are spenders and some people are savers. Dig a little deeper, however, and you’ll notice that the financially illiterate were never taught how to manage their money properly.

While some of us were brought up by parents who taught us to diligently ‘pay ourselves first’ by putting 10pc of every pay cheque into a savings account, others were brought up by parents who live pay cheque to pay cheque, and who lose the run of themselves entirely at Christmas.

To make matters worse, millennials have come of age in the instant gratification economy. They have zero-interest credit, fast-fashion, next-day delivery and a panoply of other consumer temptations to contend with.

It might help if they were taught financial literacy in school but, as with previous generations, they have learnt little to nothing about budgeting, interest rates or credit ratings during their formative education. To paraphrase the famous Noughties ad from the Financial Regulator: they don’t know what a tracker mortgage is.

The truth is that government funds and grants are only effective when they are coupled with shrewd financial planning.  The ‘citizen’s inheritance’ is a progressive and potentially transformative idea, but people have to be taught how to spend money responsibly before they are given it unrestrictedly.

How not to talk about mental health

If you’ve ever told a depressed person to practice gratitude, or asked an anxious person if they’ve tried mindfulness, then you may want to have a read of a conversation that recently went viral on Twitter.

Reporter Hattie Gladwell asked the Twittersphere to share “the most unhelpful/ insensitive thing someone has said to you about your mental illness” and the responses are truly eye-opening.

One woman was told that depression wasn’t real; another was told that she was too young to be depressed. Author Marian Keyes also got involved in the dialogue. She says a journalist wrote “what’s she got to be depressed about? She has a handsome husband” when she was in a psychiatric hospital.

A revelation of mental illness almost always elicits unsolicited advice, but the hundreds of voices who contributed to this conversation have proved that it’s sometimes better just to listen.

After all, when someone wants your advice, they tend to ask for it...

Irish Independent

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