What caught my eye this week.<\/em><\/p>\n T<\/span>here\u2019s a growing sense \u2013 I\u2019d argue a reality<\/a> \u2013 of intergenerational inequity in the UK, as with many other developed countries.<\/p>\n Whether the old having so much more than the young is an inevitable consequence<\/a> of late capitalism, a comorbidity of a broken housing market, the demographic bulge bracket baby boomers not paying<\/a> their way, or just what happens when an economy is no longer booming like it did in the 1950s and 1960s is hard to tell.<\/p>\n Probably it\u2019s a bit of everything. But in any case, assuming we don\u2019t want to transition permanently into neo-feudalism, the next question is what\u2019s to be done?<\/p>\n One option is to directly favour the young with government largesse. For various reasons, mostly political, we\u2019ve triple-locked away that solution for now.<\/p>\n The other obvious redress, redistribution, is even more controversial. At least outside of the editorial meetings of Socialist Worker<\/em>.<\/p>\n Redistribution \u2013 taxing those with more to give to those with less, obscured by so many smoke and mirrors \u2013 at least treats the thing directly. Handy if the age aspect is a red herring, and really we\u2019re just looking at greater wealth inequality.<\/p>\n The big snag though is that redistribution tends to infuriate those whose stuff is being redistributed.<\/p>\n As the UK tax take of GDP soars<\/a>, statistics showing<\/a> the top 1% already pay 30% of all income tax imply they have a point \u2013 even if income tax is not everything<\/a>.<\/p>\n There\u2019s one kind of redistribution that both the richest and the rest of us tend to support though.<\/p>\n And that\u2019s inheritance passing wealth down the generations.<\/p>\n True, long-time readers know that this is where I\u2019d personally position the nation\u2019s best tax-collecting apparatus.<\/p>\n On both moral grounds and in light of my neo-feudalism fears, I\u2019d far prefer to tax dead people who can\u2019t feel the pain than young people working, saving, and still not having enough money for a house deposit or a proper pension.<\/p>\n But hey, I\u2019m in a minority. Inheritance tax<\/a> is widely considered to be the UK\u2019s most unpopular tax. Most people hate it.<\/p>\n And yet it exists \u2013 and from the perspective of its critics, it gets in the way of the frictionless redistribution from the father to the son.<\/p>\n (And the mother and daughter of course, but as we\u2019re in the realms of neo-feudalism here, let\u2019s have all the trimmings!)<\/p>\n By far the best and easiest way to avoid inheritance taxes tithing such wealth transfers is for the eventually-to-be-deceased to give their money away sooner.<\/p>\n Currently no tax is due on anything given away if you live for seven more years<\/a>.<\/p>\n To me, this longevity lottery seems a bit ridiculous \u2013 if again entirely in keeping with the same medieval thinking that makes inheritance taxes so unpopular.<\/p>\n Why should a family be penalised because a beloved elder gets an unexpected cancer or meets the wrong end of a bus?<\/p>\n Nevertheless, encouraging the rich to pass down their wealth sooner does have one undeniably huge benefit, as Jonathan Guthrie outlines in a (paywalled) article in the Financial Times<\/em><\/a> this week.<\/p>\n As things stand, Guthrie writes:<\/p>\n \u2026the most striking feature is how little we decumulate. Most folk die with more than 60 per cent of their peak lifetime assets.<\/p>\n Adult offspring are therefore liable to inherit large sums when they themselves are approaching retirement, when the utility of the money may be lower.<\/p>\n<\/blockquote>\n Giving sooner improves the lives of heirs earlier, and in material ways. Perhaps the chance for a parent to take a few years off to care for young children, or for a family to buy a house with bedrooms for all the kids from the start. Compare such uses to the money simply sitting in a septuagenarian\u2019s bank account, maybe with a bit of the interest funding one more Caribbean cruise that gilds the lily.<\/p>\n Earlier inheritance might even help with the housing market, if it reduces the tendency for older generations to rattle around in big houses full of rooms they don\u2019t use while young families grin and bear an open-plan kitchen-diner-hallway-sofa-bedroom.<\/p>\n Well, solves it for the moneyed classes at least. But that\u2019s neo-feudalism for you\u2026<\/p>\n Guthrie suspects traditional inheritance practices have yet to adjust for extended longevity, writing<\/a>:<\/p>\n When lives were shorter and child-rearing began earlier, legacies from dead parents materialised closer to the point of greatest utility for heirs.<\/p>\n<\/blockquote>\n This must be right. Even oligarchs in the Middle Ages were lucky to make it to 60.<\/p>\n Naturally we all want to live longer lives. But if it means ever more wealth piling up at the right-hand of the curve where it\u2019s unlikely to ever be spent, then something \u2013 literally \u2013 has to give.<\/p>\n I\u2019d suggest if we\u2019re to avoid a \u2018Gen Z Uprising\u2019 in the history books alongside the First Baron\u2019s War, the Peasant\u2019s Revolt, the Boston Tea Party, and the Bolshevik Revolution then more efficiently keeping it in the family isn\u2019t going to be enough in the long run.<\/p>\n But getting wealth redistributed sooner \u2013 to where it will do the most good for those who are fortunate enough to inherit \u2013 is at least a start.<\/p>\n Have a great weekend.<\/p>\n p.s. Thanks to everyone who entered our Christmas sweatshirt competition<\/a>. I\u2019ll contact the winners this weekend to make sure they\u2019re not Russian chatbots or whatnot, and announce the \u2018lucky\u2019 recipients next Saturday!<\/em><\/p>\n What derisking your portfolio looks like [Members<\/a>]<\/em> \u2013 Monevator<\/a><\/p>\n Surviving system meltdowns and cyber attacks \u2013 Monevator<\/a><\/p>\n From the archive-ator: Are you ready for interest rate cuts? \u2013 Monevator<\/a><\/p>\n British economy shrank by 0.1% in October \u2013 Sky<\/a><\/p>\n \u201cI\u2019m helping first-time buyers onto the ladder because the government isn\u2019t\u201d<\/em> \u2013 Standard<\/a><\/p>\n \u2018Moron premium\u2019 costs the UK up to \u00a37bn a year \u2013 This Is Money<\/a><\/p>\n Huel and Moneybox head to No 10 as chancellor Reeves courts scale-ups \u2013 BBC<\/a><\/p>\n Government launches review of energy standing charges \u2013 This Is Money<\/a><\/p>\n EU backs indefinite freeze on Russian cash ahead of Ukraine loan plan \u2013 BBC<\/a><\/p>\n Teenager who received world-first Leukaemia treatment is now cancer-free \u2013 Independent<\/a><\/p>\n Unusually, long-term US interest rates have risen in the face of Fed rate cuts \u2013 Apollo<\/a><\/p>\n Disclosure: Links to platforms may be affiliate links, where we may earn a commission. This article is not personal financial advice. When investing, your capital is at risk and you may get back less than invested. With commission-free brokers other fees may apply. See terms and fees. Past performance doesn\u2019t guarantee future results.<\/sup><\/p>\n Could UK mortgage rates be below 3.5% by Christmas\u2026? \u2013 This Is Money<\/a><\/p>\n \u2026and where are buy-to-let mortgage rates today? \u2013 Which<\/a><\/p>\n Interactive Investor will rollout new prices in February \u2013 Interactive Investor<\/a><\/p>\n Get up to \u00a31,500 cashback when you transfer your cash and\/or investments to Charles Stanley Direct through this affiliate link<\/a>. 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Investor underperformance is an old story \u2013 Morningstar<\/a><\/p>\n Quit: The Power of Knowing When to Walk<\/em>\u00a0by Annie Duke \u2013 \u00a30.99 on Kindle<\/a><\/p>\n A Man for All Markets<\/em> by Edward Thorp \u2013 \u00a30.99 on Kindle<\/a><\/p>\n The End of Reality<\/em>\u00a0by Jonathan Taplin \u2013 \u00a30.99 on Kindle<\/a><\/p>\n Lean In: Women, Work, and the Will to Lead<\/em> by Sheryl Sandberg \u2013 \u00a30.99 on Kindle<\/a><\/p>\n Or pick up one of the all-time great investing classics \u2013 Monevator<\/em> shop<\/a><\/p>\n Will net zero really cost UK households \u00a3500 a year? \u2013 Guardian<\/a><\/p>\n Rising sea levels are already affecting US home prices [Research]<\/em> \u2013 Richmond Fed<\/a><\/p>\n GDP growth no longer linked to carbon emissions in most of the world \u2013 Guardian<\/a><\/p>\n Would you pay up for climate pledges? \u2013 Klement on Investing<\/a><\/p>\n White storks to make historic return to London in 2026 \u2013 Guardian<\/a><\/p>\n What if the economy was modelled after ecology? \u2013 Atmos<\/a><\/p>\n The case that we\u2019re over-investing in AI infrastructure \u2013 Paul Krugman<\/a><\/p>\n To grow we must forget, but AI remembers all \u2013 DOC<\/a> [h\/t Abnormal Returns]<\/em><\/p>\n Can machines suffer? \u2013 Aeon<\/a><\/p>\n Creatives bemoan the impact AI has had on their jobs\u2026 \u2013 BBC<\/a><\/p>\n \u2026but tech veteran Tim O\u2019Reilly argues we can thrive with AI \u2013 Big Think<\/a><\/p>\n Meanwhile, Moonpig says use of AI is driving up greetings card sales \u2013 Guardian<\/a><\/p>\n 13 rebel Labour MPs join Lib Dems in vote for talks on rejoining EU customs union \u2013 BBC<\/a><\/p>\n Everyone is gambling and no one is happy \u2013 Kyla Scanlon<\/a><\/p>\n US could ask tourists for five years of social media history \u2013 BBC<\/a><\/p>\n Europe is under siege \u2013 Noahpinion<\/a><\/p>\n America has become a digital narco-state \u2013 Paul Krugman<\/a><\/p>\n Trump pardons like a super-villain from Batman\u2026<\/em> \u2013 The Bulwark<\/a><\/p>\n \u2026and this recipient went straight back to his old tricks \u2013 Bloomberg<\/a><\/p>\n The longest solar eclipse in 100 years is coming \u2013 Wired<\/a><\/p>\n How Britain lost its shipbuilding industry [Podcast]<\/em> \u2013 A Long Time In Finance<\/a><\/p>\n With \u2018super-flu\u2019 circulating, should you get a vaccine? \u2013 BBC<\/a><\/p>\n Understanding carriage [On Netflix \/ Time Warner]<\/em> \u2013 Seth Godin<\/a>, Stratechery<\/a>, Variety<\/a><\/p>\n Stagnant construction productivity is a worldwide problem \u2013 Construction Physics<\/a><\/p>\n If war broke out how long could Britain really fight for i? \u2013 BBC<\/a><\/p>\n The art of loitering in London \u2013 The Londonist<\/a><\/p>\n Why we save anything at all \u2013 The Root of All<\/a><\/p>\n \u201cMoney often costs too much.\u201d Like these links? Subscribe<\/a> to get them every Saturday. Note this article includes affiliate links, such as from Amazon<\/a> and Interactive Investor<\/a>.<\/em><\/p>\nThe bank of grandmother and grandad<\/h3>\n
How soon is now?<\/h3>\n
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An age-old story<\/h3>\n
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From Monevator<\/h3>\n
News<\/h3>\n
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<\/a><\/p>\nProducts and services<\/h3>\n
Comment and opinion<\/h3>\n
Never too much about SOR and SWRs mini-special<\/h3>\n
Naughty corner: Active antics<\/h3>\n
Kindle book bargains<\/h3>\n
Environmental factors<\/h3>\n
Robot overlord roundup<\/h3>\n
Not at the dinner table<\/h3>\n
Off our beat<\/h3>\n
And finally\u2026<\/h3>\n
\u2013 Ralph Waldo Emerson, The Conduct of Life<\/a><\/em><\/p>\n