Britain Needs To Shift Tax From Young Workers To Older People And Property, A New Report Says

A report published today by the Institute for Public Policy Research (IPPR) says Britain needs to change how it collects tax. Right now, working-age people pay more than their fair share, while wealth held by older people and property is barely touched. The IPPR has close ties to Labour.

The report lands just as the Prime Minister has refused to rule out tax rises in the Budget, the government’s yearly announcement about tax and spending.

The report was written by Oxford academic Ben Ansell. He points to one big problem. The state pension currently costs the country about 5% of everything it earns each year. By the 2070s, that’s expected to rise to nearly 8%. Two things are driving this. The population is ageing. And the triple lock, the rule that guarantees the state pension rises every year, keeps pushing the cost up.

Ansell doesn’t want to scrap the triple lock. Instead, he wants pensioners to start paying National Insurance, the tax taken from working people’s wages that helps pay for the state pension. Right now, people stop paying it once they retire. He also wants to scrap council tax and stamp duty, the taxes on owning and buying a home, and replace both with one simple property tax. His report singles out one group as being hit hardest by the current system: young people repaying student loans.

The backlash was instant. Critics on the right said the plan punishes people who worked hard and saved for decades, only to be told the rules have changed. They argue it discourages exactly the kind of saving the government says it wants to see.

Both sides have a point. The IPPR is right that younger workers are carrying more than their share of the tax burden, while older people’s wealth mostly goes untouched. That much lines up with the numbers below. But the pushback isn’t wrong either. Someone who spent forty years playing by one set of rules, only to be told late in life the rules have changed, has a real grievance. What’s different today is that this is no longer just an argument people have online. It’s a real proposal, with a named author, sitting in front of the Chancellor, the minister in charge of the economy, who has already said tax rises are coming.

To understand why this proposal exists, it helps to look at the two policies underneath it.

The triple lock

The triple lock costs the taxpayer £15.5 billion a year more than if the state pension had simply grown in line with wages since 2010. Compared with prices, it costs £22.9 billion more. Here’s how it works. Every April, the state pension goes up by whichever is highest out of three things: prices, wages, or 2.5%. It’s never the lowest of the three, always the highest. And it isn’t means-tested. That means it doesn’t matter how much money someone already has. A pensioner living on the state pension alone gets the same rise as someone who owns their home outright and has a large private pension on top.

The full state pension is now £12,548 a year. The personal allowance, the amount you’re allowed to earn before paying any income tax, is £12,570, and it’s been frozen since 2021. That leaves just £22 of headroom between the two. If the state pension is someone’s only income, they’re currently protected from paying tax on it.

But if they have anything else on top, even a small private pension, a bit of savings interest, or some part-time work, that extra money now gets taxed almost straight away. There’s barely any room left to absorb it.
Student loans

Graduates are facing the opposite problem. Anyone who started university in England from September 2023 repays their loan under what’s called Plan 5. You only start repaying once you earn above a certain amount, called the threshold. Plan 5’s threshold is £25,000, the lowest of any student loan plan. And if the loan isn’t paid off after 40 years, whatever is left gets wiped, the longest wait of any plan.

Graduates on the older Plan 2 loans have a different problem. Their threshold should rise each year in line with prices. Instead, the government has frozen it at £29,385 for three years running. The Institute for Fiscal Studies (IFS), an independent research group, estimates that freeze alone adds around £3,000 to what a typical graduate repays over their working life. For people earning in the middle of the range, it’s closer to £5,000.

Put simply: one generation gets a guaranteed pay rise, by law, every single year. The other has had its repayment terms quietly held in place while prices keep climbing around it.

The case for keeping the triple lock

This isn’t as one-sided as it sounds. The UK’s state pension is still low compared with many other countries. Pensioner poverty was a real problem before 2011, which is exactly why the triple lock was brought in.

Most people over 66 paid into National Insurance for decades. Many were told it worked like a promise, not just a general tax. Changing that isn’t as simple as flipping a switch.
Graduates have their own version of unfairness too. The lowest earners barely repay anything, because their income rarely crosses the threshold.

People in the middle end up repaying far more than they originally borrowed, once interest is added.

The bigger picture

People currently over 60 grew up in a very different economy. Most bought a home on a single salary. Many had a workplace pension that paid a guaranteed income for life, the kind of scheme that’s now largely closed to new members. The result is stark. People aged 60 and over own around 55% of all housing wealth in the UK, worth close to £3.84 trillion. People under 35 own only about 6% of it.

Compare that to where younger people are starting out today. In early 2026, 1.01 million people aged 16 to 24 were not in education, employment or training, known as NEET. That’s the first time this figure has passed a million since 2013. Six in ten of them have never had a job at all.

Not every pensioner is comfortable. Plenty rely on the state pension alone and have nothing else. But the triple lock doesn’t tell the difference between that pensioner and a wealthier one. It rises by the same amount either way.

Will today’s taxpayers ever get it themselves?

The state pension age is already rising to help cover the cost. It goes from 66 to 67 by 2028, then from 67 to 68 by 2046, and a further review is underway.

The IFS has worked out what keeping the triple lock actually costs in these terms. If the triple lock stays exactly as it is, the pension age could need to reach around 70 and a half by 2060. If the pension simply tracked wage growth instead, it could stay closer to 67 and a half. That’s a three year difference, and it falls entirely on people paying into the system right now.

More than one in ten people currently aged 25 are expected to die before they turn 70.

Scrapping the triple lock overnight would cause real hardship for pensioners who have no other income. Freezing student loan thresholds further would make an already bad deal worse. And keeping the triple lock exactly as it is might end up costing some of today’s taxpayers the pension itself, if the age they’re allowed to claim it keeps climbing to pay for it.

If you’re repaying a student loan, it’s worth knowing which plan you’re on and what your threshold is. If you’re a pensioner with any income beyond the state pension itself, it’s worth checking whether that income is now taxable.

Tell me in the comments. Which side of the argument do you fall on?

This article reflects the author’s own view and is for general information only. It isn’t personal financial or tax advice. Speak to a regulated financial adviser about how any of this affects your own situation.