[...] Receiving a lot of healthcare from the NHS does not really make people 'better off' than those who do not need that care (although the recipients would be a lot worse off if they had to pay for it privately). [...]

• low and high earners should pay the same share of income in tax (a proportional system;
• higher earners should pay a higher share of income in tax (a progressive system);
• both should pay the same amount in tax (a regressive system).

They were also asked how state pensions and unemployment benefits should relate to their previous earnings--whether they should vary according to past contributions or likely need:

• previous high earners should get more because they had paid in more, that is, they should be earnings-related;
• they should get the same, through flat-rate entitlements;
• previous low-earners should get more because their needs are greater, implying, for instance, that benefits should be means-tested.

If we are looking for a reason for pressure on those with middle incomes, it is not at the bottom end we should be looking. Rather, it is at the top. If anyone got too expensive, it has, in fact, been the rich.

[...] there is both continuity and change in people's circumstances from year to year. We do not live in a country where there is an annual lottery to determine at random who is rich and who is poor for the coming year regardless of where they started last year. But nor do people generally stay stuck in the same place. Those who start poor are more likely to stay poor the next year than those who do not, and those who start rich more likely to stay rich. But many in each group--and those in between--move up or down the income ladder each year.

[...] Today, social housing--rented out at below market rates by councils and not-for-profit housing associations--is in many people's minds synonymous with housing people with low incomes. But it was not always like that--back in 1979, more than 30 per cent of people with incomes in the top half of the income distribution lived in social housing. By 2004, it was less than 10 per cent. Between those years, the supply of social housing available to let to new tenants each year dwindled--fewer new houses were built; property was sold off through the 'Right to buy', so that when occupants moved or died it was not available as social housing, and fewer tenants moved out of social housing or died.

• they can act as disincentive to additional earnings;
• they can give an incentive to behaviour that reduces reported income (including misreporting of circumstances to slip below particular thresholds);
• they can lead to feelings of injustice, if those just below a threshold are treated much more favourably than those who are only slightly better off;
• uncertainty about which side of a threshold someone will fall once all the calculations are done can add to barriers to access.

The equity issue--and the challenge for polices in a range of years--is not simply of one fortunate generation versus another. It is about the advantages of the better-off half of baby-boomers compared to_both_ poor baby-boomers and to those members of younger generations who do not stand to inherit. It is one thing to be one of a small number of grandchildren of owner-occupiers living in the South East of England, and quite another to be one of a large number of grandchildren of tenants or even of owners in parts of the country with low house prices.

[...] while it makes sense to protect state pensions, better-off pensioners could contribute more through the tax system. But the politics of this are fraught--when George Osborne announced the end of the extra tax-free allowance for those aged over 65, it was instantly condemned as a 'granny tax'. Other proposals that might affect better-off pensioners often face objections where some low-income pensioners who would be affected are held up in front of them as a kind of political and fiscal human shield.

Up to a basic level, it can be argued that there are public benefits from encouraging pension saving, as otherwise the state and taxpayer could end up having to do more of the job. But tax relief is worth most to the highest paid and goes disporportionately to them. For instance, a higher rate taxpayer putting £1,000 into a pension pot at age 40, and paying basic rate tax in retirement, would get an eventual net return back of £5,500, compared to only £4,150 for a basic rate taxpayer, of £3,900 if either had invested in a tax-free ISA getting the same underlying return on investment.

[...] The issue is not just between a lucky generation of baby-boomers now approaching retirement who got the best pension deals and benefited most from the house price boom, and a younger 'jilted generation' who have little. Many baby boomers have little wealth, and only a minority enough to see them through retirement without state pensions playing a major role. And a significant proportion of younger people stand to gain a great deal from inheritance and lifetime help from parents and grandparents. The conflict of interest is ultimately between the more affluent half of the baby-boom generation and poorer members of their own generation and younger households with the 'wrong' relatives, for whom advantage will not cascade down the generations.