/ Money

Pensioners have got it easy

Elderly couple relaxing on grass

Are the elderly getting special treatment at the expense of the young? A recent report says they shouldn’t be exempt from swingeing budget cuts. But should the most venerable and vulnerable members of society be hit?

Pensioners have got it made. They get state handouts, free bus passes, free TV licences and allowances for winter fuel. They’re even getting a planned increase in their basic state pension above inflation.

And what do they need that extra money for, anyway? They’ll only spend it on luxuries like food, bills, clothes and maybe the odd gift for their grandchildren.

You may think I’m being a little unfair to the over 65s but this isn’t actually my assessment. These are the findings of independent think tank the Institute for Economic Affairs (IEA).

Pampered pensioners?

The report ‘Sharing the burden – How the older generation should suffer for its share of the cuts’ states that older people enjoy a privileged position at present and that they have been exempt from spending cuts.

The report claims that by including older people in the cuts, the government could save an additional £16bn a year.

Among other measures, the paper proposes that the cuts would include the abolition of free bus travel (£1.3bn saving), the scrapping of free TV licences (£0.7bn saving), raising the pension age to 66 by 2015 (£5bn saving) and the ditching of winter fuel allowance (£2.1bn saving).

Philip Booth, one of the authors of the report, said that:

‘The government has imposed many new burdens on the younger generation in how it has chosen to cut…They [the government] have let older people remain largely insulated from much of the cuts. It’s time this changed.’

He went on to say that the IEA review would lead to huge tax decreases that would benefit everyone, including the elderly.

Matter of survival

Now, while it’s true that the younger generation will be hit hard by the cuts, should we penalise those who have paid tax and National Insurance all their lives?

Gandhi said that: ‘A nation’s greatness is measured by how it treats its weakest members’.

Far be it from me to say that pensioners are our nation’s weakest members (my dad can still beat me in an arm wrestle and he’s 76!), but there are many who depend on their benefits to survive. If we abolish these and make them live on meagre savings and a smaller pension, we can effectively take the Great out of Great Britain.

Glen Greaves says:
3 March 2011

Another well off member of society, with no understanding of the real world attacking weaker member of society. We already have two in Government **** bent on dragging us into the dark ages. Is he the 4th horseman?
Many elderly people do not hold a driver’s license so he effectively wants to cut them off (scrap the free bus pass) from the rest of society. The elders of our nation paid their dues leave them alone.
Go after the big organisations who are looking to escape paying taxes. Here you’ll find grim reading of what the coalition government and the Liaison Committee of representatives from businesses have in store for large multinational organisations. http://www.hm-treasury.gov.uk/corporate_tax_reform.htm
The Liaison Committee of representatives from businesses are guiding the government on tax reform. So let me ask you this will you consult prisoners on how to build a jail?

Would go further than Glen.

I have a condition that makes driving inadvisable but not prohibited. I doubt if I would have given up but for the bus pass

Don’t overlook the benefits to the whole of society in making it easier for people to age gracefully

Tony says:
3 March 2011

Well I feel really embarrassed by this report, I had no idea I was so well off! I am coming up to 80 so if they can bear with me until then I shall willingly donate my extra 25p a week pension to the Government’s declining coffers.

What a load of old Tosh!!

I am 80 my state pension is totally inadequate. After standard expenses I have £12 to £15 a week to buy food and cleaning materials – You try to eat and survive on such a pittance.

If my pension had kept place with average earnings – as it used to be before THATCHER – I would be 40% better off.

The Institute for Economic Affairs haven’t got a clue.. But nor has this Government.

I’m waiting for the first incidences of death by starvation or Hypothermia in the elderly. Mind you whether the media will bother to publish it is yet another matter.

Pickle says:
4 March 2011

I’m 85 Have paid off my mortgage after years of saving hard – which you youngsters should do – so admittedly I am better off for that. Now have to live on a pension set years ago and only increased by a miserly amount yet food and fuel cost have risen a staggering amount – so still have to budget carefully to stay alive and keep out of the hands of loan sharks.
With creaking joints and loss of hearing, I think we need the odd benefit.

I’ve been reading reactions to this report in lots of different newspapers (as well as on here, of course) and as far as I can see it’s a lot more complicated than many are making out. To say ‘I’m older and I struggle’ is no different to saying ‘I’m a student and I can’t afford £9,000 tuition fees.’ Of course we shouldn’t cut benefits for older people who need them, just as (in my opinion) we shouldn’t be making such huge cuts elsewhere

The point of the report, though, is to highlight the discrepancy in who is being hardest hit. Although public services are being cut left, right and centre, benefits are being slashed for younger people, students are missing out on the free education that older generations enjoyed, older people aren’t being asked to make the same sacrifices.

So, I think the question shouldn’t be ‘do pensioners have it easy?’ But rather ‘is the balance of sacrifice fair?’

JR says:
9 March 2011

I keep hearing about the free education that we baby boomers enjoyed, but no mention of the fact that something less than 4% of us were able to get university places – the rest of us had to go without.

Secondly, the move to linking pensions to the CPI rather than RPI, over the longer term is not an insignificant cut in pension benefit.

Thirdly, once retired there is usually a greater need for heating, and to be able to get out of the house. I believe it is recognised that the real rate of inflation for pensioners is significantly more than CPI or RPI figures indicate.

Finally, as already mentioned, pensions have been under attack long before the current difficulties (Thatcher!!)

hok says:
4 March 2011

I’m 68 and retired in 2010 having started working at 17. I was made redundant twice (1) from my original company after 23 years and subsequently from a engineering company after 10 years.I paid into contributory pensions with both of these companies and at 60 and 65 received deferred pernsions which together with my contributory State retirement pension certainly do not allow me to lead an extravagant lifestyle. It is said that my generation is the one that still supports (financially, physically and emotionally), both our parents, our siblings, our chldren and grandchildren. For me this was and is true. I was unemployed for one week in my life and took maternity leave after the birth of my 2 children. I really enjoy my Freedom Pass and buying a Senior Rail Card (£26 pa) to give me discounted rail travel. I believe I’ve made a contribution to each community I’ve found myself in and am thankful to still contribute by volunteering with a charity that gives those I work with new horizons for getting back to work. Life is a lot easier after the struggles of the past.However, I’m wondering if I can really afford the £8+ per month for my WHICH subscription!!!??

Tony says:
4 March 2011

I do agree with Nikki Whiteman that it is all about the balance, however it is very difficult for older people to supplement their income. Most of us rely on savings we have made during our working lives or have to cut back on certain things, which is not a trend I see in the majority of the younger generation.

Completely agree – A student does not have to pay his loan back if s/he moves abroad or does not finish the course.

The OAP has ALREADY paid for everything up front – yet still we’re told we are “rich” on £97 a week the single state pension – and should take cuts (ignoring that our incomes actually ARE being cut like everybody else with VAT fuel price rises etc)) – even though the OAP pension amount should be 40% higher than it is now – In effect we’ve had annual pension cuts since THATCHER stopped the link with average earnings over 15 years ago.

I don’t think many actually realise how little we get. They just decide because we own our homes (ignoring the sacrifices we needed to make to get them) we are all comfortably off.

The me me me culture raises it’s ugly head again.

Like hok I’m wondering whether I can afford my Which? subscriptions any longer!!

richard – I agree with you on most of your points (i.e. it *is* very difficult to live on the state pension, people who have saved should be entitled to enjoy retirement, not expected to fork out again, etc) but I think it’s a bit unfair to say that wanting balance in cuts is part of a ‘me me me’ culture. I know a lot of younger people who scrimp and save and work extremely hard to pay for their education – it’s not easy for them either! Many of them won’t be able to build up savings or pay for a house until they are older (very interesting conversation on this the other day: https://conversation.which.co.uk/money/are-todays-young-the-worst-off-in-history/ )

I just wonder why we so often feel the need to polarise the debate i.e. “kids these days have it so easy” vs “the older generation have it so easy.” I think it’s quite consistent to say that one group is being harder hit by the government spending cuts without implying that they deserve it.

Nikki –

Your thought would have a better chance if this “conversation” was NOT entitled – “Pensioners have got it easy”

Quite frankly I don’t think I have – or had – it easy – and I have contributed to society all my life – including fighting for my country – volunteering for organisations – survived a couple of recessions too. Not to mention suffered under the Thatcher Oppression

I do not take kindly to conversations entitled “Pensioners have got it easy”

Nikki –

The conversation https://conversation.which.co.uk/money/are-todays-young-the-worst-off-in-history/ ) was so crass – I treated it with the contempt it deserved.- and ignored it.

The person who wrote it had no concept of HISTORY – nor the conditions applying during the times. History did not start in 1980

Hello Richard,

It’s worth pointing out that the title to this Conversation is inspired by the conclusions made by the Institute for Economic Affairs. In fact, it’s not actually the opinion Nick holds – he explains at the end that taking the benefits from pensioners would “take the Great out of Great Britain”.

The title is only one small part of our Conversations, which is again demonstrated by the piece I wrote about the financial pressures today’s young face. That title is pulled straight from First Direct’s research, where three quarters of the 3,000 polled agreed that today’s young people ‘are the most financially pressured in history’. I actually explain in the piece that that’s an exaggeration.

As far as this Conversation, I tend to agree with Nick and the other commenters – we spend all our lives paying tax in order to have a break when we retire. Why should we have to suffer until we reach our death bed? I’m quite happy to pay for the benefits that pensioners enjoy – if I didn’t, I wouldn’t deserve them myself when I get old.

I’m not yet a pensioner. During my life I’ve paid my taxes and worked – as I should. As I get less able to work I hope that the provision I’ve made will be sufficient to support me reasonably well. This isn’t money I’ve stolen, it’s money saved, along with taxes and employer contributions that were part of the contract of employment and the social contract. If the tacit agreement between the state and its citizens is broken, by unilaterally cancelling or altering contracts, then we cannot expect younger generations to have any loyalty to their country or society. They will see the example of how hard working people can get taken advantage of by those in power (government and big business) and say “forget it” – take what you can when you can.

In relation to the specific point about balance, we have to consider that older people may well have paid in more than younger people, so should expect to get some recognition for this. In addition, older people become less able to work as the effects of aging occur – so are less able to improve their income. Supporting retired people will help the economy: by keeping them active and fit there will be less of a cost to the NHS; keeping them mobile enables them to take part in the economic and social life of the country – meeting others and spending what money they have.

Let’s not descend to the lowest factor by taking from the poorest in society so that the self-serving rich can retain their great wealth, to the detriment of society as a whole.

Tony says:
4 March 2011

I agree with both Richard & Phil. Nikki, I am glad to read that you know a lot of youngsters who scrimp and save to further their education, I admire them for it. However, I do believe that they are in the minority. My 19 year old twin grandchildren live with me & I have had to support them from my savings for the last 3 years. I hear and read a lot of feedback from their friends, the majority of whom manage to make their monthly pay last for about 3 weeks and are only interested in clubbing, pubbing & their next holiday.

Sybilmari says:
4 March 2011

I believe the government must be becoming aware of the widespread hostility to their mad economic decisions – not that they recognise them as mad! Picking on pensioners is another way of scapegoating and getting some of the population blaming another section of the population. They have tried scapegoating all people on benefits as scroungers and layabouts; now they are trying another tack. The corporate companies and governments are the ones who ‘lost’ or ‘gave away’ huge chunks of our money. They use ‘divide and rule’ tactics to distract us from the real issues. It’s time for us all to stand together and not let governments bully us into believing we have to pay for their ineptitudes and corporate greed. Where has all the money gone anyway? Mars? It was only on computers! We could do with some lateral thinking and courage to do what is right and good. :O)

I agree that we need to do something about the defecit. It is very well known that indirect taxes e.g. VAT and fuel duty have a proportionally greater effect as incomes fall whereas direct taxes e.g. income taxes have a greater effect as incomes rise. In my view a greater emphasis should be placed on raising revenue by maipulating direct rather than indirect taxes.

You quote the report as saying,

They [the government] have let older people remain largely insulated from much of the cuts. It’s time this changed.’

Of course, the people who are really insulated are the very rich, and the big corporations. If they were not using perfectly legal means of avoiding taxes, there would probably not be a problem.

As Richard says above, pensioners are paying higher levels of tax, duty and VAT. Some of the benefits cited in the report cost the country nothing – if pensioners did not use the free travel on buses they would be virtually empty off-peak and there would be fewer of them to provide the peak-time services that the economy requires; similarly on the trains where the same discount for off- peak travel is also available to students and families. Many people who are now of pensionable age were extremely prudent in their life-times and built up savings in order to secure their future without making undue demands on the welfare state; the reward for that providence has been to see their incomes from savings and investments reduced to a pittance.

John – it is actually worse.

The pensioners are the only section of British society that are forced to pay for long term care until they are paupers. A care home costs at least £30,000 a year per person – So if the pensioner has been prudent and bought a house now worth say £150,000 sacrificing holidays etc to pay for it when times were very hard – it means the government will force them to pay say £30,000 a year for five years then die a pauper – many illnesses last at least five years though one of the main purposes of buying a house was to leave something to the children – not to pay for health care – which we were told was free “from cradle to grave” No other section of society is treated so badly

Also if you are ill enough to go into hospital – your pension is stopped.- ignoring that your house debts will continue to build up while you are in hospital.

As I said – “Pensioners have got it easy”- don’t make me laugh!!

Kay Williamson says:
5 March 2011

I’ve been a pensioner for 3 years, incase anyone doesn’t know thats the age you apparently become a pensioner. I read in the first paragraph we get free tv licences. I can categorically put the record straight and tell everyone that this is not the case, I just had to pay £145.00 out of my few little pounds that I get each week, I couldn’t go shopping for 3 weeks and that’s the truth. You DO NOT get a free TV licence until you are 75 so PLEASE STOP saying that we get all these free things because it just isn’t true.

I am a Pensioner and think that It is great that
I get free travel in the Borough in which live but I do not agree that I should get free travel elsewhere.
I think that fuel money should also be scrapped .
By all means give it to the people who really need it..
Don’t we get £10 at Christmas as well?
Scrap that too..

May I suggest that you donate your Winter Fuel Allowance (bought in because old people died through Hypothermia) and your cold weather payment back to the government to go towards rich people’s tax allowances.??

Today’s pensioners were, also, young once and paid tax & NI to cover, amongst other things, for our care and pensions later. Regrettably successive government over-spending has resulted in a system where the payment of each generation has had to be used to pay the care and pensions of each previous generation, instead of its own. For some reason there, now appears to be a move by the IEA to get current pensioners, who paid for their predecessors, to now pay for themselves on top and, somehow, square the circle.
Having had Gordon Brown savagely attack our pensions with his tax on the companies we should be allowed some peace to enjoy anything we have managed to save – just like our predecessors.

I see the IEA are Westminster based and a charity.

I propose that the charity status of any organisation that does not provide direct support to the community be abolished. Any “charity” that acts as a lobby are a parasite on society and certainly do not deserve a tax break for giving advice to politicians. Perhaps a spokesman for the IEA could describe how they justify their tax free status? Leeches.

I guess there are no OAP’s contributing to the report from the Institute of Economic Affairs?
If there were, they would appreciate that older people have been hit far harder and now (rather than later in their life as is the case with student loans) due to the loss of saving interest and energy costs.
There’s plenty of scope for the Banks and Tax Avoiders to pay more but the Government wouldn’t dare.

Nicholas says:
9 March 2011

I agree that there shoulld be equality of sacrifice, for the old as well as the young, so could it also be arranged for the young to do National Service, and live of wartime and postwar rations for the appropriate period?