The UK tax regime is remarkably generous to those with accumulated savings, with a raft of options for receiving interest, dividends and capital gains with little or no tax. This includes ISAs, SIPPs, VCTs and FITs, National Savings Certificates, and other assets that are taxed very lightly.

By contrast, taxation on earned income is heavier than on unearned income, because National Insurance (effectively an income-tax surcharge) is deducted from earned income.

House ownership appears to be taxed very generously with low property taxes and no capital gains tax on sales.

As wealth and assets have tended to accumulate through the working lives of the current older generations, all these tax-advantages tend to favour those same generations. IF is studying how the combined effect of UK tax policy affects the relative position of the old and young.