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A new report has called on the government to take action after financial pressures of tax and debt are shown to be increasing for young people.

The iPod generation is at risk of finding themselves with a 50 per cent tax burden, suggesting that the numbers of people in debt are only set to increase.

A new report from think tank Reform has forecast a bleak future for young people in Britain who it says are likely to see a worsening of their financial position.

Class of 2006: A Lifebelt for the iPod Generation, blames compulsory payments and taxes continuing to increase on top of new commitments such as student debt repayments and pensions contributions.

It predicts that the average graduate aged 21 to 35-years-old will have an effective tax burden of nearly 50 per cent by early in the next decade.

This is in addition to growing pressure from rising debt, modest earnings growth and lack of savings, resulting in significant difficulty for many young people to get onto the housing market.

"Voters of all ages are aware of the difficult and worsening economic position of young people," said Professor Nick Bosanquet, the report's lead author.

"This issue is key to future economic growth as well as fairness between the generations.

"We urge the government to give serious attention to it."