Wealth inequality is set to increase in the United Kingdom, where wealth is unevenly divided across the country. In order to offset this issue, the Think Tank of the UK suggested that a Citizens’ Wealth Fund could distribute a dividend of at least £11,000 from 2030 to those at 25 years of age as means to aid youths for access to housing, investments, continued education and freedom to experiment and start businesses. This would enable youths to have the ‘opportunity effect’ into wealth.

The Institute for Public Policy Research (IPPR) Research Paper proposed that the UK can transform a portion of its national private and corporate wealth into public wealth, which could be capitalized through a mix of existing assets, including a collection of 3% taxes on activities in the publicly- owned stock (ie. RBS shares) exchange market.

IPPR estimates that if the fund is established by 2020/21, the return yield could reach to 4% per annum. By 2029/2030 financial year, the Citizens’ Asset Fund could accumulate up to £186 billion, enough to distribute an evenly dividend of £10,000 to 72.3 million UK citizens of age 25. The dividend would be able to aid youths into future investments of real estate, businesses and continued education.

IPPR senior economist, Cary Roberts explains, the country itself is a wealthy nation, but wealth is unevenly divided, “those who are wealthy and those who inherits the wealth have become very important.” The Fund will allow citizens to share the wealth that the country has inherited and promises that each citizen will be able to benefit from the increased wealth and not only for those who are has obtained or inherited certain assets. IPPR research suggests, wealth belongs to the entire nation and should not be managed independently by the government.

Most funds around the world achieve a long-term return of 4 per cent above inflation; this is substantially higher than the historically low cost of borrowing available to the government currently. Maintaining public assets as assets, rather than selling them off, would maintain a healthy public-sector net worth. It would also enable multiple generations to benefit from public assets, acting as a powerful force for intergenerational equality. If the revenue from North Sea Oil the government received in the 1980s had been invested in a fund, it would be worth over £500bn today; future assets must not be squandered in this way. Norway did invest its oil revenues, and today has a fund worth over $1 trillion (£710bn).

A study by the IPPR last year revealed that the wealthiest 10 per cent own 44% of wealth in aggregate. Such individuals own on average around £13M from stock shares, properties and pensions. Across the nation, 50% of the citizens combined only own 9% of the country’s total wealth, averaging at £3200 per person.

The value of wealth distributed among different generations has been a hugely sough-after problem. Specialists from IPPR suggested since WWII, the value of wealth has decreased dramatically each generation and will continue to do so, with a prominent problem of expensive housing. As housing prices rises, individuals will need to seek other ways to inherit the nation’s wealth.

Source: Ming Pao