Older property owners should be taxed more ‘to address rising costs of ageing population’
A report from the Institute for Public Policy Research (IPPR) argues that Britain needs to overhaul its tax system, shifting the burden away from younger workers and onto property wealth and older generations, warning that an ageing population will drive nearly 80 per cent of the UK's additional fiscal pressure by 2075. Written by Oxford professor Ben Ansell, the paper calls for a new "fiscal contract" that includes extending national insurance to older earners and replacing council tax and stamp duty with a single proportional property tax. This comes as Prime Minister Andy Burnham declined to rule out tax rises in the autumn Budget, saying he "won't be unrealistic" about the state of public finances amid unresolved questions over funding for defence spending and social care reform.
The report notes the proportion of over-65s in the UK will rise from 18 per cent today to 27 per cent by 2074, pushing state pension costs from 5 per cent of GDP to 7.7 per cent, and adding almost 10 per cent of GDP in combined pension, healthcare and social care costs by 2075. It highlights that older people remain among the most tax-advantaged groups since they do not pay national insurance, while younger workers, including those repaying student loans, bear a disproportionate burden. Key proposals include extending the 2 per cent NI surcharge to over-65s, introducing a roughly 0.65 per cent proportional property tax in place of council tax and stamp duty, and equalising capital gains tax with income tax rates alongside an investment allowance.
- IPPR urges shifting UK tax burden from young workers to property and pensioners
- Ageing population to drive 80% of extra fiscal pressure by 2075
- Proposals include NI on pensioners and a new property tax
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The UK’s tax system raises money for public services and social security, including pensions, healthcare and social care. National Insurance is paid by most working-age people, while people over 65 generally do not pay it on earnings.
The Institute for Public Policy Research is a think tank that studies public policy. Its paper, written by Oxford professor Ben Ansell, argues that an ageing population will increase pressure on public finances and examines whether more of the cost should fall on older people and property wealth.
Council tax is a local charge based largely on a home’s value band, while stamp duty is usually paid when property is bought. The proposals would change how those taxes and some investment gains are taxed, raising questions about how the costs of public services should be shared between generations and between people with different kinds of wealth.
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The case for
Supporters argue that Britain faces an unprecedented fiscal challenge as the proportion of over-65s rises to 27 per cent by 2074, with demographic pressures threatening to consume an additional 10 per cent of GDP in pension, healthcare and social care costs. They contend that the current tax system is fundamentally unfair, as older people enjoy exemption from national insurance contributions whilst younger workers—particularly those repaying student loans—shoulder a disproportionate burden. With property wealth heavily concentrated among older generations, proponents see a proportional property tax as both economically rational and morally justified, arguing that those with the greatest ability to pay should contribute to the costs their longevity imposes on public services.
The case against
Critics counter that many pensioners have already paid substantial taxes throughout their working lives and planned their retirement based on longstanding tax arrangements, making retroactive increases fundamentally unfair. They argue that a broad property tax is a crude instrument that would inflict genuine hardship on ordinary homeowners living on fixed incomes, who lack liquid assets to pay increased levies despite owning properties in appreciated areas. Rather than restructuring the social contract, opponents suggest alternative approaches including spending reforms, efficiency gains in public services, or targeted measures on genuine wealth that would avoid penalising the modest pensioner whose only significant asset is their home.