Millennials '˜picking up tax burden from baby boomers'

According to accountancy firm Moore Stephens, the tax burden has fallen 4% in the past year for the baby boomer generation - those born between 1946 and 1965 - as millennials, born between 1977 and 1995, paid an extra £5 billion in tax.

Much of the shift is down to demographics, with the taxable income of baby boomers falling as they retire while the taxable income of millennials increases as they climb the career ladder.

But Moore Stephens noted that recent tax policy changes disproportionately favour baby boomers at the expense of millennials and Generation X - those born between 1965 and 1977 - which is hastening the shift.

The accountancy firm said millennials rather than baby boomers are more likely to be affected by the rise in stamp duty land tax, restrictions imposed on the amount that can be saved tax free via pensions and the increase in tax and national insurance for higher earners.

Baby boomers are also benefiting from changes to pension rules that mean pensioners no longer need to buy an annuity, on which income is taxed.

Moore Stephens said baby boomers have also largely avoided paying stamp duty land tax in recent years as older generations are less likely to move into new homes compared with millennials.

Stamp duty land tax income for the Exchequer rose 10% to £11.7bn in the last year compared with £10.6bn in 2015-16.

Baby boomers paid £63bn in income tax for the 2015-16 financial year, representing 38% of the overall income tax take, compared with 40% for the year earlier.