Millions of Brits under 40 eligible for £12,500 lump sum in radical new plan
A new proposed scheme to help under 40s who are struggling financially has been dubbed a 'state alternative to the bank of mum and dad'.
We're all aware that it's hard being a young adult in the UK right now. The average age someone buys their first home has risen from 29 in the mid-90s to 34, according to a report published this year by Skipton Group.
Meanwhile, research from Debt Advisory Services has found that, excluding mortgages, the average UK adult is in £4,300 of debt - which includes overdrafts, car finance, credit cards, buy now pay later schemes, etc.
Earlier this year, a think tank found that the average Brit would be £480 worse off this year, thanks in part to the impact on energy prices from the US' war with Iran.
Advert
If that all makes for horribly grim reading, you'll be pleased to hear a radical new advance pension plan could be just the tonic to help out millions of Brits.
The only caveat? You must be between 28-40, and you'll have to make a big sacrifice later in life to get the cash.
The Social Market Foundation think tank has recommended that people under the age of 40 in the UK should be allowed to draw a year's worth of their state pension right now, to help lessen their financial issues in the ongoing tough financial climate.
That would see those who applied for the advance receive £12,548, which is the current annual value of the full new state pension.
In exchange, the age when they start receiving the state pension when they reach retirement would be pushed back by a year.
According to a survey of 25 to 40-year-olds, most would spend the money on debt repayment (18 percent), while the second most popular use for the cash was housing (16 percent).
Suggested by Andrew Lewin, Labour MP for Welwyn Hartfield, the plan has been titled the 'Citizens Advance.'
Jamie Gollings, deputy research director at Social Market Foundation, said: “Britain is facing a crisis of opportunity.
"Whether you can buy a home, pay down debt, or start a family increasingly depends on the wealth of the parents you were born to – not the work you've put in.
“The Citizens Advance changes that. It’s not a handout – it gives younger people access to capital they've already earned, at the moment in their lives when it can make the biggest difference. Our research shows this isn't just popular across the political spectrum, it'll be transformative.
"The cost of inaction is a generation locked out of homeownership, drowning in debt, and losing faith that the system can work for them at all.”
Who would qualify for a Citizens Advance?
According to the think tank, anyone aged between 28 to 40 would qualify for the Citizen Advance, but only if they have accumulated a minimum of 10 years of National Insurance credits.
Time spent caring for children or relatives could also count towards eligibility, based on the principle of contribution.
It's claimed that the majority of 25-40 year olds at 54 percent were in favour of the proposal, even if they wouldn't take it themselves. Only six percent saw it as negative.
Though the plan certainly sounds appealing, there's no sign yet that it will be made into policy by the government.
Topics: Money, Cost of Living
Daniel Murphy