The think tank report was produced as part of the work of the Intergenerational Commission – chaired by Lord Willetts and including TUC general secretary Frances O’Grady and CBI director-general Carolyn Fairbairn – has come up with the proposals as a way to ensure a better funded NHS and care system, and boost the prospects of younger generations.

In order to tackle millennial housing issues, the Commission proposes halving SDLT for first-time buyers and movers, but not those owning multiple properties (at a cost of £2.7bn) and offering a time limited capital gains tax cut for selling properties onto first-time buyers. It says this would put first-time buyers in a far stronger position in the housing market.

It suggests introducing a restricted use ‘citizen’s inheritance’ payment of £10,000 for all 25 year olds which it says would provide up to half of a deposit for a typical property outside London, or vital capital to start a new business, demonstrating that Britain has something to offer young people whatever their background.

This would be funded by replacing inheritance tax with a new lifetime receipts tax that tackles widespread avoidance, levies the tax on recipients not estates and entails lower tax rates for all.

Other recommendations for ironing out inequalities include introducing indeterminate tenancies and three year light touch rent stabilisation, so renters can put down roots. Giving zero hour contract workers the right to a regular contract, and shift workers greater notice of when they are working, would also help reduce the risks that young people bear.

In order to improve health and social care options for older people, the Commission proposes a £2.3bn NHS levy to put it on a firmer financial footing. This would be funded by applying NICs to pensioners’ earnings and, at a lower rate, to the income of richer pensioners, rather than raising NICs for working age people.

It also suggests replacing council tax with a progressive property tax, including deferred payments for asset-rich, income-poor families. A new model for care provision should also ask those able to contribute towards their care to do so, but subject to strict limits.

David Willetts, executive chair of the Resolution Foundation, said: ‘From an NHS levy to put healthcare on a firmer financial footing, to building more homes and a citizen’s inheritance to boost young people’s career and housing aspirations, our report shows how a new contract between generations can build a better and more unified Britain.’

The Foundation’s recommendations are in response to analysis which shows that the disposable incomes of millennials at age 30 are no higher than the generation before them (generation X) at that age – despite the economy growing by 14% over the last 15 years. In contrast, the incomes of baby boomers at age 30 were more than one third higher than the generation before them.

It says millennials are half as likely as the baby boomers were to own their own home by 30, and are four times as likely to rent in the private sector. Millennials in their 20s are more likely to be in insecure work, are 25% less likely to have moved jobs than generation X were at the same age, and are missing out on big pay rises as a result.

In addition, the number of families bringing up children in the private rented sector has trebled in the last 15 years, to 1.8m.

Meanwhile, state spending on health, care and social security is set to increase by £24bn by 2030, and by £63bn by 2040. The Foundation says this increase needs to be funded in a way that is fair to all generations, and argues that Britain’s contract between generations is under severe strain.

Resolution Foundation: New generational contract: the final report of the Intergenerational Commission

Report by Pat Sweet