/ 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.

Helen says:
9 March 2011

Luxuries like food, bills and clothes?? Since when is food a luxury? Since when is it a luxury to pay utility bills? Is Nick Cheek being a little tongue-in-cheek? I wonder. I’m a pensioner; I’ve worked, paid tax (still do!), national insurance, all that. I don’t have any grandchildren, so Nick can be relived that I won’t be wasting all my millions on them – though I may spend a bit on my cats. What? Pensioners shouldn’t have cats? Mea culpa! I pay the same bills as those who are working, the same council tax, the same amount of money for food. But my income is much, much less. I do have a car but I don’t use it much (though my husband, who has mobility problems, does); I prefer to use public transport for reasons including the environment and the fact that it’s free. If the freedom pass were withdrawn, I would be virtually housebound as would many other pensioners that I know. It shouldn’t be a question of people over 60 vs younger people. Government funding should go to both. How to make savings? Hit those who don’t need it – mega-earners (one less yacht won’t matter, will it?), large corporations, weapons manufacturers… What? They won’t vote Tory any more? Hooray!

The IEA report, unfortunately, was incomplete. Had it read “the fatcat elderly shouldn’t be exempt from swingeing budget cuts” it would have provided the solution. As in the rest of society, the fatcats are the problem. While some elderly have to survive on £5000 a year there are those who live on a few million a year in pension. Nobody needs that sort of money in retirement. Yet there are public servants :- top teachers, health service managers, managers of public bodies/quangoes, top teachers, policemen, other professionals, councillors, consultants—- the list goes on and on, who move from extremely high public sector salaries to extremely high public sector pensions. The simple expedient of capping these at a reasonable level would release a huge amount of money to help less well off pensioners.
You won’t, however, hear the IEA say that.

Castadiva says:
9 March 2011

If someone is trying to live on state pension alone thenhe/she deserves all the “perks” they can get. The terrifying rise in fuel bills alone(especially if like me you depend on oil to heat your house) means that pension alone is inadequate. BUT again if like me you are retired ,single, own your own house and have a work(teaching ) pension plus the state pension then the situation is very different.
I have never been better off and, within reason, can do much as I like. Should I get all these hand outs? I doubt it but I get them and I use them to the hilt. I don’t feel that (apart from fuel and heating) I am sharing the pain of others on basic state pensions. And there are many of us about who can go on holiday when we want ,eat out ,go to theatre and cinema and ,generally lead The Life of Riley. The government should be getting its money not from cuts but from personal income tax. You should pay tax according to your level of wealth so that poor pensioners should pay nothing and wealthier ones shoud pay (a lot ) more. Just to put my situation into perspective I get £18000 a year after tax. I think I’m very well off and I should pay more

Well it is very easy – Send say £10,000 of your pension every year to Age Concern – who does try to do something for the aged. There are far far more pensioners who have far less than you..
Not to mention so do a great many teachers.

It is why I object to the title of this conversation. “Pensioners have got it easy” no question mark. On £97 a week I certainly haven’t – and because I can remember the affects of the previous means test I will not apply for funds using that method – the reason being I should have the £123 (the amount the pension rises to and grudgingly given after the means test) as a right if it hadn’t been for THATCHER removing the link to average earnings years ago.

£97 is BELOW the poverty line – yet this is the standard single pension “awarded” after paying tax and National Insurance all their lives – just like many millions of other pensioners.

E. Edwards says:
9 March 2011

I regret to say that pensioners paid for the members of this reports education and are still paying taxes, we paid for our pensions, which are one of the lowest in Europe, why shouldn’t we have free bus passes etc. This is the politics of envy and gives the message, DO NOT do anything for yourself, you will only be penalised.

Polly says:
9 March 2011

I’d like to understand where IEA’s calculations come from. Where can I read a copy of the report? Poor people, young and old, are going to be hurt by the cuts and have got only a little better chance of a university education now than they had 60 years ago. The rich, young and old, will find a way to avoid them. The problem with this debate is that the life style of the average school leaver today would have seemed like luxury to the majority of those growing up in the 40s, 50s and even the 60s. Most of us pensioners find it hard to see why young people today think we’ve had such a good life when we had to leave school at 16, take any job you could( not wait for the one you wanted,), not be paid for holidays or sick leave and live with your parents until you could afford a deposit on a house. After 40+ years of paying NI you get a meagre pension and have a high risk of being treated appalingly in NHS hospitals and LA care homes. This is what polarises this debate. Today’s,by our terms, affluent youngsters have a comfortable life; they live in centrally heated homes, get ferried around in cars, or own their own. They don’t have to be one of the brightest 2% to get the chance to to university, and can be fussy about the job they will take. It takes forever to save for a house but until recently it was easy to get a mortgage. Comparing their lives with the unrepresentative few middle class people who were bright enough to go to university instead of the majority of pensioners who didn`t is bound to cause the reaction you have seen in these columns and elsewhere. OK the baby boomers now approaching pensioner status had a much better life than their parents but they are a tiny proportion of the pensioner community, and even for them life was nowhere near as comfortable as for most people today . Better surely for pensioners to campaign for free access to the educational opportunities we did not have and for the youngster to campaign for dignity and comfort for the elderly – after all they will all end up elderly one day God willing.

Hi Polly, we linked to the report in our original post above but it was quite easy to miss – here it is again for you:

Liz says:
9 March 2011

I am rather suspicious of the IEA.’s reported findings. I belong to a number of organisations and meet and know quite a lot of pensioners, of which I am one. It’s absolutely true that I know quite a number, very comfortably off – expensive holidays, paid help in the home and the garden, no problem apparently to pay for all sorts of expensive items, and I agree these people would not even notice if all the help, such as free bus passes and winter fuel payments were taken away, But there seem to be far more elderly people, who are living in very straightened circumstances, needing as much help as they can get. People, who have worked hard and saved hard all their lives. Whose needs are not really being met by these ‘hand outs’. People who need a proper pension, which they thought they had paid for and that they were promised, ’till Mrs Thatcher decided otherwise.
How deep a survey has the IEA made? Have they really obtained enough real hard statistical information about people’s true wealth to truly be able to come up with this sort of report? It is not very easy to really find out people’s true financial position. There are so many variables, and many of the really poor elderly hide their poverty as best they can.

OK so we have free bus passes and don’t use them YET. But the way things are going under this dreadful government, quite soon I won’t be able to afford the fuel for my car, and then will have to take the bus. I shall have to use the bus in another ten years anyway-or remain stuck here in my house in the sticks, because I can’t afford the bus fare! You do NOT get a free TV licence until you are over 85 I believe-I certainly don’t get one. So our pension pays for our food, our fuel, our rates, our transport, our entertainment(TV licence, I suppose) and the odd present for the grandchild. WHAT THE **** IS WRONG WITH THAT? Its not free–the majority of us have paid into our pensions all our lives–you’re not giving us charity–we are claiming our pensions as a right–so stop with the condesending attitude. I suggest that you middle management civil servant types who get a fat paypacket, a fat civil service pension and an even FATTER BONUS, give up all the bonus for at least five years. I suspect that that will help balance out the economy in no time! Have the courtesy to leave over 65’s in peace-they deserve it!!

George says:
9 March 2011

It is quite simple to understand why pensioners have been spared the cuts which others are suffering.
They are four times more likely to vote than the younger generation, so all political parties wish to woo their votes. As can be seen by the debate here, pensioners are also more vocal in making their views known (and have the spare time to do so in their retirement!).

You really have missed the point haven’t you?

We the pensioners are not and have not been spared any cuts in fact a great many of us are now far worse off than we were.

I think the reason more pensioners are represented here – is simply because pensioners are the topic of this conservation.

Josephine says:
9 March 2011

I retired at 65 almost 12 months ago. I have, been lucky enough, I suppose, to work either full or part time since I was 16 years old, having a gap of 6 years when I had two children and in those days we left work to look after them. Only getting family allowance for both in 1977. School uniforms were, in real terms, more expensive as they were bought from designated shops.

Like most pensioners we did not get child tax credits or any other tax credit, we didn’t get paid maternity leave, and men didn’t get paternity leave, they just some took holiday owing, we just worked and paid tax and national insurance and had what we could afford. We no longer have the opportunity of working overtime! I do think the 25p extra when aged 80 could be scrapped as it is an insult, worthless and must cost more to administer than it benefits anyone.

So get off of our backs we should be entitled to some quality of our remaining life. We are entitled to our pensions, and the few benefits we do get.

Jack says:
10 March 2011

Pensioners have had to work all their lives to qualify for one of the poorest pensions in Europe.
How do you compare that with the illegal immigrants who have been allowed to stay in the UK and instantly qualify for full benefits, including properties in London that no British pensioners could ever afford.

Yes, those pensioners who can afford to do so should share in helping with the current problems, and I suggest that this means those pensioners who have sufficient income to pay income tax, of whom I am one. But in the 2011/12 financial year it has already been decided that we shall each contribute £110. How? Because those under 65 will see their income tax personal allowance increased by £1000, saving the basic rate payer £200, but those over 65 are getting a personal allowance increase of only £450, saving us only £90. These rates have already been announced, and of course it means that we shall suffer a comparative loss compared with the under 65s every year until the whole system is changed.

I do not know how many pensioners pay tax, but I would suggest that this is going to save the Government a very large sum, and I would suggest that this is sufficient contribution from OAPs.

Tony Halliwell says:
10 March 2011

First, pensioners are, to some extent, going to be disadvantaged, in the sense that those receiving age allowance will not benefit from the increase in the tax threshold that younger people benefit from.

However, I do think there is a case for pensioners to make a greater contributuion. I would suggest that the winter fuel allowance be paid from the same age as the old age pension- going up in due course to 68. However, I would not like to see the transport concessions reduced. Insofar as these benefit those who cannot afford cars, they are well targeted. Insofar asa they benefit car owners, they keep traffic of the road and help support the struggling transport infrastructure.

The clown who wrote this article needs to do proper research. As I pensioner who lives of personal savings I resent having to support the basks – who give me 0.2% on savings and re-lend at up to 28% – and this rat-bag Government who have the cheek tax “income” that doesn’t remotely match inflation.

Get your facts right IEA.

pre-pensioner says:
12 March 2011

It is true that pensioners entitled to the higher tax allowance will not benefit from the £1000 increase given to under 65’s, but have you forgotten that in 2008 pensioners had an increase of over £1480, while under 65’s had inflation increase only? Memory can be selective! Anyone over 65 who pays tax at all has an income of approaching £200 per week, well above the basic state pension. Personally, I am around four years from official state pension age (the goalposts having moved some years ago) and count myself lucky that I will not have to wait until 68, although I can understand the reason for that change. At present I earn less than average earnings, qualify for no benefits and pay for everything- as I would expect. However I have a son who, after failing to find a job after graduating, is struggling to get his own business started, has loans of what I would feel a frightening amount (we have no savings with which to help), no possibility of buying a home, and living off an overdraft – he too gets no benefits and pays for everything, and I have to confess that I believe we had it easier at his age. I can look forward in a few years to a mortgage-free existence, a bus pass which I will certainly use (at present I struggle to pay the bus fare to work), and a few extra perks such as not paying tax. He will probably have to work until at least 70, and I suspect will have a much lower pension in real terms.There will always be those in every age group who struggle to make ends meet, and those who have more money than most of us think is reasonable – although having bought Saga magazine, I do wonder how many pensioners could possibly afford some of the things advertised! Instead of a blanket condemnation of pensioners, baby boomers, thirty-somethings or youngsters, would it not be more constructive for all who can to do something to help someone less fortunate – and there always is such a person.

Why is it that governments always attack easy targets and the current generation always thinks the previous one has always had it better than them and owes them something ?

The government is too afraid of the banks to go after them and make them pay their fair share of taxes but is not afraid to penalise those who have worked and paid tax all their working lives. The latest suggestion is to amalgamate Income Tax & National Insurance which would penalise pensioners who rely on savings as the combined rate of tax would be 32%.How is that fair?

As for the younger generation who seem to think they are unfairly treated and older people should not be better off than they are despite having worked for 40 years, grow up, the world doesn’t owe you a living.
Where do they think all the things that they take for granted came from ?They were paid for by the sacrifices of their elders who can’t be expected to keep them all their lives.

I have worked hard to get where I am and I intend to enjoy my retirement not be subjected to ever increasing taxation by a government consisting of those who were born with a silver spoon in their mouth.

Much of that report is uttter nonsense. I am a pensioner, living on primarily on personal savings – receiving 0.2 to 0.5%. This is lent by the banks to – amongst others – younger people with subsidised mortgages, who have the benefit of my savings.

Recently the BBC’s finance guru stated that the rise in High Street banks’ profit was a result of reduced bad debts – that (with respect to Preston) is rubbish. A high proportion of the rise in bank profits is due to what once was called the ‘endowment’ effect of free balances. Every £1,000 of free money can be turned into £10,000 (or more) by lending out at from 5% to 30%. Money for ‘old rope’.

Pensioners with any investments have done too well either. They may have been high earners in the past, but whatever they have managed to save is eroded by uncontrolled inflation.

We have lost substantiually over the last few years, but can’t get any allowance for that – unlike the corporate sector.

Bryan Varnam says:
24 March 2011

Yet another report bashing the older generation. One has to ask what sort of qualification has the Institute of Economic Affairs got to be able to make such a report? What sort of real research did they do? Who vets such organisations? There seems to be numerous ‘bodies’ spouting off inaccurate assumptions without any real basis for their conclusions1

CBC says:
24 March 2011

I am a pensioner and I agree that pensioners could contribute more to reducing our Country’s current deficit.
I would suggest that anyone receiving a pension over £100k p.a should be able to chip in a bit more than their current tax contribution. There could then be a sliding scale so that the real fat (retired) cats make a significant contribution rather than leave the money in some trust or other similar tax avoidance scheme.

anthony bartlett says:
25 March 2011

Being one of these papmpered i dont know if u realise that our Brave Chanceellor did not have the GUTS mention in his speech that despite what primeminister said during the election campaign they would not rpt not cut pensioners fuel allowance but as i have jusjt discovered that is exactly what they have done.

If you disagree with this report about pensioners having it easy, you’ll be glad to hear that Paul Davies is questioning whether this is really true following another report that says many pensioners are living on the bread line.
Have a read – and have your say here: