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The Progressive Policy Think Tank

Give £10,000 universal minimum inheritance to all 25-year-olds

New IPPR research shows that a Citizen’s Wealth Fund could help to address growing wealth inequality

A Citizens’ Wealth Fund should be created to give everyone a stake in the economy, according to a new report for the IPPR Commission on Economic Justice. The fund could be large enough to pay all 25-year-old UK-born citizens a one-off capital dividend of £10,000 from 2030, providing a universal minimum inheritance for all.

The report proposes that the Citizens’ Wealth Fund would be owned by and run in the interests of citizens. It would help address growing inequality by transforming a part of national private and corporate wealth into shared net public wealth, and using the income to ensure everyone benefits from rising returns to capital. The proposal show how this could be achieved within the next two parliaments.

A UK Citizens’ Wealth Fund could be worth £186bn by 2029/30, if started from 2020/21. The report proposes capitalising the fund using a mix of asset sales, capital transfers, new revenue streams, a small amount of borrowing and returns reinvested through the decade. These could include:  

  • reformed wealth taxes, including a new accessions or gift tax to replace inheritance tax
  • a ‘scrip tax’ of up to 3% requiring major businesses to issue equity to the fund, or pay a tax of equivalent value. This would moderately dilute shareholder value but would not affect firms’ working capital
  • asset sales including the government stake in RBS and the wind down of UK Assets Resolution programme
  • transferring the Crown Estate into the fund.
  • a small amount of borrowing at historically low interest rates that are less than the expected returns from the fund

The UK is a wealthy nation, but that wealth is very unevenly divided. The wealthiest 10% of households own 44% of the nation’s wealth, while the least wealthy half of households own just 9%. Unequal ownership of economic assets drives inequality because the share of national income going to capital in the form of profits has been increasing, and is likely to rise further, while the share going to labour, in wages and salaries, has declined. This means that the people who own wealth have faster rising incomes than those who do not.

IPPR has previously made two proposals alongside a national Citizens’ Wealth Fund to counteract rising inequality: new tax incentives to encourage employee ownership trusts and new support for co-operative and mutual businesses.  Taken together, the three proposals would help broaden and democratise the ownership of capital, giving everyone a stake and a say in the economy.

Over 70 governments around the world have sovereign wealth funds, capitalised from a range of sources. Norway invested its income in a sovereign wealth fund established in 1990. Today, Norway’s fund is worth over US$1 trillion. The IPPR report shows that, had the revenues from North Sea oil been invested in a sovereign wealth fund in the 1980s, such a fund would have been worth over £500 billion today. The New Zealand Super Fund is an international example of a fund that was capitalised through general taxation rather than resources or other windfalls.

The IPPR report further proposes that:

  • A one-off capital dividend is paid to all 25-year-olds of around £10,000. This would provide a lump sum at an age where young people are looking to invest in their futures, for example through buying a property, investing in education, or starting a business. Providing everyone with the means to do this would equalise the ‘opportunity effect’ of holding assets
  • The use of the dividend should be unrestricted to avoid market distortions and excessive paternalism and that the dividend would be taxed as dividend income to increase the progressiveness of the proposal.
  • By owning wealth in common, the fund would act as a force for economic equality by distributing returns to capital more widely. It would also facilitate the fair sharing of public asset sales and other windfalls between generations. It could therefore be a powerful tool to tackle growing wealth inequality in the UK.
  • Given the low cost of long-term borrowing and the higher real rate of return for the majority of sovereign wealth funds – and broader returns on global equity - one source of capitalisation could be to issue government bonds to raise funds to purchase a broad portfolio of assets.
  • The fund should be independently managed but accountable to Parliament. Board members should be selected through a public appointments procedure.
  • Parliament should define the investment mandate and ethical obligations of the fund, which might for example include requiring the fund not to invest in the arms and tobacco industries, and sustainability requirements.

Carys Roberts, IPPR Senior Economist said:

“Who owns wealth and who will inherit wealth is becoming more important - increasingly so as the share of national income paid to people through wages declines. A Citizens’ Wealth Fund would enable citizens to collectively own a portion of our national wealth, and make sure everyone benefits from rising returns to capital, not just people who will inherit or who already own assets."


Sofie Jenkinson, 07981023031, [email protected]

Florri Burton, 020 7470 6154, [email protected]  


The full IPPR report Our Common Wealth: a Citizens’ Wealth Fund for the UK will be available from 00.01 Monday 2nd April at

The size of the fund in 2029/30 is estimated using the value of existing public assets from the OBR’s Economic and Fiscal Outlook November 2017, our estimates of new revenue from taxes and royalties, a one-off issuing of government bonds and a return of 4% above CPI that is reinvested in the fund through the 2020s.

IPPR believe average returns of 4% above CPI per year are achievable, as most funds around the world have comfortably reached or exceeded this rate in the long-term. The benchmark return should be reviewed periodically and Parliament should be able to adjust the target, to manage the risk of lower returns.

The size of the dividend is estimated using live births data and assuming a fund worth £186bn in 2029/30 will achieve a 4% real return to be spent on the dividend in the following year.

The £10,000 dividend should also be paid to citizens born outside of the UK who have held citizenship for a number of years; this would require a larger fund than IPPR have modelled, beginning payouts later, or a smaller dividend.