All UK-born citizens should be given £10,000 as a “universal minimum inheritance” when they turn 25 to help address growing wealth inequality, a thinktank has proposed.

Tax reforms and a selloff of assets including the government’s stake in Royal Bank of Scotland could help create a citizens’ wealth fund worth £186bn by 2029/30, the Institute for Public Policy Research (IPPR) said.

Such a fund would give everyone a stake in the economy and help young people invest in their futures, for example through buying a property, investing in education or starting a business, according to a report for the IPPR Commission on Economic Justice.

The fund could be large enough to pay all 25-year-olds a one-off capital dividend of £10,000 from 2030.

The report proposes capitalising the fund using a mixture 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 such as a gift tax to replace inheritance tax, and a “scrip tax” of up to 3% requiring major businesses to issue equity to the fund. The authors also propose national asset sales including the RBS stake.

According to the IPPR, the wealthiest tenth of all UK households own 44% of the nation’s wealth, while the least wealthy half of households own 9%.

More than 70 governments around the world have sovereign wealth funds. Norway invested its oil income in a sovereign wealth fund established in 1990 that is now worth more than $1tn (£713bn). The IPPR report claims that had the UK’s revenues from North Sea oil been invested in a sovereign wealth fund in the 1980s, such a fund would have been worth more than £500bn today.

Carys Roberts, an 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.”