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Are today’s pensioners really the ‘golden generation’?

Old woman walking into distance

A new report from Age UK has reignited the debate about how easy life is for pensioners. With today’s meagre state pensions, high inflation and rubbish savings interest rates, are pensioners that well off?

The Age UK research, which is part of a campaign to help people access the £5.4 billion in unclaimed pensioner benefits each year, paints a grim picture.

Nearly half of pensioners say they are just ‘getting by’, with one in ten claiming that they’re really struggling.

The majority of pensioners live on low-to-middle incomes and are being squeezed by rising food and energy costs. So if you’re a pensioner, it’s likely that you’re cutting back on your heating, going out less and buying cheaper food.

Easy? You’re having a laugh

Previously we put forward the idea that perhaps ‘pensioners have got it easy’, following the publication of a report by the Institute of Economic Affairs. The report, ‘Sharing the burden – How the older generation should suffer for its share of the cuts’, suggested that older people enjoy a privileged position and shouldn’t be exempt from cuts.

This provoked a strong response from most of you. Many were keen to point out that the current state pension is inadequate, and that you’d already paid your dues over the years, making any free benefits (bus passes or TV licenses) well and truly earned.

Age UK’s findings seem to support this and dispels the notion that today’s retired are some sort of ‘golden generation’. The idea was that people who retired 10 or more years ago were beneficiaries of generous final salary pensions, high annuity rates and buoyant investments.

But although it’s fair to say that many pensioners do have enough money to survive and can even help out their children and grandchildren, most aren’t in such a privileged position.

The moral dilemma

Is there also a moral question here? Many older people will have worked all their lives, paying tax and National Insurance. Yet, in return, they’re receiving one of the lowest state pensions in Europe.

Other European countries have a culture where they cherish and look after their elderly citizens, making them the priority, rather than creating a situation where they are financially excluded and isolated within society.

So, without making generalisations, are pensioners fair game to absorb the many cuts being implemented by the government? Or are they struggling enough already and even require more help from those currently in work?

This latest report would seem to suggest that if you’re a pensioner, you’re probably living on the breadline. So, in my view, we should be doing more to make your later years as comfortable as possible.

evie says:
18 April 2011

Once again, this is a broad generalisation – yes, there are pensioners who struggle to make ends meet, just as there are young singles, parents, middleaged couples who also struggle. Simply being over 60 , or over 65 or any other arbitrary age, should not mean that we are automatically shielded from the cutbacks which will affect all other sections of the population.The older generation may indeed have worked hard, but who is to say that the younger will not be working equally as hard over their lifetimes? Like it or not, we ARE all in this together, and there is little point in comparing one age group with another – comparing one income group with another would make more sense.

Ann says:
19 April 2011

I’d like to see you manage on £95/week state pension. The problem with todays generation is they’ve become selfish and entrapped in a world where materialism means everything. Lets get back to basics and make family the No1 priority.

I am a recently retired 66 and receive my basic state pension of £102.15 per week. I listened to the warnings and made separate pension provisions many years ago. Because of this I was contracted out of additional State Pension I receive only the basic State Pension. Post 65 my tax code rose from 645 to 949 but it was a shock to realise that because the State pension is delivered free of tax the tax code was reduced to 418 to take account of that pension.My code was further reduced to take account of my other pension.
I am now operating with a tax code that is much lower than that which applied when I was in employment.
It is true what they say about death and taxes and the former seems to be the only way to escape the latter

Your tax code has changed, but this doesn’t directly affect the amount of tax you pay. The state pension is taxable, but this tax is deducted from your other private pensions rather than from your state pension. Hence the lower tax code that is applied to other pension income.

What I think is a bigger issue, and blatantly unfair, is the gradual removal of age-related allowance over a certain income (£24,000 in 2011/12). This unfairly penalises many over-65s who have paid into a company or private pension.

Martin Scherer says:
20 April 2011

Spare a thought for the self-employed owners of micro-businesses. Their pensions rely in part on the sale of their business and/or premises on retirement. Many such businesses have been destroyed by recession and property values decimated. Many will now be forced to work on for another ten years or survive on the meagre state pension.

Anyone contemplating self-employment or starting a micro-business should think twice, yet these are the businesses the UK will rely upon to emerge from recession.

The trouble is that pensioners like me have a fixed income and many due to the infirmaty of age do not have the option of seeking work as other age groups have. We are stuck with low income and rising prices with no possible way out,

I am a pensioner, aged 88. Everyone on a tight budget has to cut back on heating, going out less and buy cheaper foof. Why should pensioners not also have to do this?

I’m 80 – and my £102 does not leave me money to cut back without serious hardship I was already below the poverty line – I paid every penny in income tax and National Insurance asked – for a living pension – not a starvation fee.

A very small percentage increase annually on a very small pension equates to next to nothing, and yet bills and food rise way beyond. Each year a pensioner’s income pays for less.
We do have one of the lowest state pensions in Europe.
Tomorrow’s pensioners will indeed have paid their taxes the same as today’s pensioners, but they will receive much higher pensions from which current pensioners are exempt.
I agree that many of us do not have the option of working to supplement income due to the infirmity of old age.
Pensioners in this Country must be finding it increasingly difficult, and are worried that income is falling behind rising costs. Unless they are amongst the lucky few that have large private pensions as well as savings and investments.

I feel that it is high time for all pensioners to get together and become organized and make these political parties listen to us. we are fobbed off time and time again when we ask for decent pensions if we tell the x party that unless they sort out state pensions we will vote for the y party, we will then make some headway, there are several million of us and if we all vote we will probably have more pensioner votes than all the other votes put together, lets get organized and show them our power they cant take the Micky out of us any longer Cameron made a statement tonight saying that he changed the pension rise mechanism to be fair to pensioners it will cost us 2.5 percent of our annual rise this equates to a 50% reduction for this year and forever. Lets fight for our rights we have earned it over the years. Half the Arab states are on revolt lets start our own

Susan says:
21 April 2011

I’m 62 and I have to admit that I have been living quite comfortably on my Basic State Pension and my Pension Credit (currently £107.31 and £25.29 a week respectively) since I retired two years ago! Granted not everyone qualifies for Pension Credit but those who do also get full housing benefit and full Council Tax benefit. In my case these amount to £76 and approx £20 a week respectively. So if you add together my pension, pension credit and housing benefits, effectively my total income is equal to £228.60 a week! Then on top of that, pensioners get a Winter Fuel Payment of £200 a year plus an extra £20 or £25 every time the temperature drops below a certain level! Then there’s the free prescriptions and free bus passes, which I reckon save me about £10 a week. So add the Winter Fuel payments and the money saved with bus passes/free prescriptions to the £228.60 and you end up with about £243 a week. Now whilst this might not be a fortune, I really don’t think it’s that bad at all. I didn’t use to take home much more than that when I was working full time.and I had to pay fares and other work-related expenses out of it! So I wish that Age Concern and some OAP’s would stop trying to make out that pensioners have a hard time financially – because I don’t feel hard up at all.

Derek Turner says:
21 April 2011

Please tell me how you draw your state pension at 62?
All i can say is very lucky you
I feel you must know a lot about the system to be able to claim all above.
Please please tell us all
Thanks derek Turner

derek turner says:
18 May 2012

You wont feel hard up with all that lot coming out of the council rates system that other pensioners who also paid all there taxes and private pensions and tried very hard to to prepare for there retirement only to find out that most of there private pensions who struggled very hard to pay is taken off us

derek turner says:
9 June 2013

then lucky you then maybe you would not object to the government claiming some of your allowances and sharing with us that don’t get any ware near that and that. and that includes paying into private pensions and our wonderful government taking a large amounts from me.

Well, Susan, aren’t you the lucky one. Your costs of living must be less than many, and not everyone gets pension credits, Housing Benefit, Council Tax Benefit, or even want means tested benefits.
Do you live in the London area? Do you have children & Grandchildren who are also struggling? Do you ever manage to treat yourself to anything, or are you just existing rather than living? Do you ever have a holiday, or a meal out? Do you belong to any clubs that require membership fees?
I am not talking about living the high life, but just very modest down to earth living.

Susan says:
21 April 2011

Larna, as I had already admitted that not everyone qualifies for Pension Credit, there was no need for you to point that out to me. As to your second point that not everyone wants means tested benefits, are you suggesting that the Government (out of Tax Payer’s money) should give everyone the same level of Pension Credits and other benefits regardless of their financial status (even millionnaires) because surely that is the only alternative to means tested benefits?

And yes, I do have grown-up children who are struggling and I have lent them all a lot of money over the past two years, which I doubt I will get back in a hurry! And yes, I do go out for a meal etc *************. I haven’t been on holiday since I retired but that is only because out of my Pension, I have finally been able to replace my 30-year old lounge and dining room carpetting and get new laminate flooring fitted and the two double wardrobes that I built myself when my kids were young and buy two decent wardrobes – neither of which I could afford when I was working full time!

The trouble with so many people these days is that they seem to think the State should pay them enough money to allow them to go on holiday, pay for luxury items like mobile phones and expensive nights’ out and keep them in cigarettes (or even cannabis)! Why on earth should ordinary, working Tax Payers pay benefit claimants enough to be able to do all those things? No! Benefits should only cover essentials like food, gas and electricity and basic clothing needs.

Susan – Pensioners expected a living state pension as a right in return for their compulsory “contributions” It is not pension credits but the standard old age pension as was promised. The current single state pension is below the poverty line – and pensioners should not need to suffer means testing to have a living pension – that is one above the poverty line.

I haven’t been on holiday since I retired – I can’t afford it – I can only just afford to eat and that cost is rising.- as is gas and electricity. Plus my pension does not rise in line with wages – so I suffer an effective pay drop every year. It now represents around 40% drop in real terms since Thatcher removed the link.

Susan says:
9 June 2013

In reply to Derek Turner, yes I would mind if the Government claimed back some of the allowances I get because as far as I am aware, all pensioners are entitled to free prescriptions, all pensioners get their winter fuel payments and although the age for getting a free bus pass has recently gone up slightly, eventually all pensioners are able to get one – including millionaires! And the reason some pensioners are not entitled to Housing Benefit and/or Council Tax Benefit is because their income is over the qualifying threshold!

As Larna suggested, my cost of living is lower than most because I have always known how to shop and cook wisely. Plus I still do all my own decorating and since I am a skilled dressmaker, I am able to later clothes to fit me or to update them rather than keep buying new ones. I also do all my own gardening and DIY, like making a computer station out of some laminated chipboard I had saved from a dismantled wardrobe! So please don’t begrudge me my hard earned benefits Mr Turner!

As for how I managed to get State Pension at 60, as I was born in 1948, I was automatically eligible to retire at 60 and the Pensions Service sent me a letter informing me of my right to claim State Pension a few months before my 60th birthday. They also informed me that I may be entitled to Pension Credit. And it doesn’t take a genius Mr Turner to find out that if you are receiving state benefits of any kind AND that if you are working or retired and on a low income, you can also apply for Housing and Council Tax benefits! So please don’t insinuate that I may be some sort of scrounger “who must know a lot about the benefits system” just because I made it my business to find out what other benefits I might be entitled to! Instead, all pensioners should make it their business to find out what other benefits they might be entitled to – and claim them!

Derek Turner says:
21 April 2011

Sorry Susan
Did not notice that you are female
Should have read your male more slowly
Derek Turner

evie says:
21 April 2011

My mother in law (now 80) has always insisted since the day she retired that she has been much better off as a pensioner than when she was working…….
As said before, there are pensioners who do struggle, but NOBODY needs to struggle to exist on the basic pension alone – if you refuse to claim the extra to which you are entitled, whose fault is that? And why on earth should pensioners living six months of the year in Spain recieve the winter fuel allowance? There are also some very well off pensioners!

I agree with Evie about the winter fuel allowance. I know of one couple who come back to England for the qualifying period in order to get WFA. As WFA allowance is a universal benefit even millionaires get it. And, whoopee, when you reach 80 you get a whole 25p addition to your pension!

Mikhail says:
22 April 2011

Prepare for the worse my dear friends. Follow the logic > pension age increases = older people will remain at work = less young people will be able to find a job > now add to this growing population and technological unemployment. Does it sound as a bright future to you?

Solutions => depopulation (easy) or moving to the resource based economy (hard), any other offers will be welcomed!

Welcome back to:- Death in Service, crime on the increase, no middle class and poor relying on charity. So much for progress.
There are alternatives through investment, training and respect but not from a Conservative Government.
Let’s not forget that it was the Private Sector bankers that created the recession and needed bailing out

Susan says:
22 April 2011

In response to Richard’s reply to my original comment, whilst I agree that everyone who has paid NI contributions should get a pension that is enough to live on, let’s not kid ourselves that pensioners have ever been any better off (even under Labour Governments) because they haven’t! The problem is that no British Government has ever managed pension contributions well enough to provide ever-increasing numbers of pension-age people with decent pensions. Therefore the only way they can afford to increase the income of those who have never paid into a private pension fund, either because they genuinely could never afford to or because they were too short-sighted to plan ahead, is to keep the Basic State Pension low and only pay Pension Credit to those who do not have any other income. And if for whatever reason they haven’t provided for their old age by any other means, then why shouldn’t pensioners need to “suffer” means testing if they want a better standard of living than the Basic State Pension provides? Because the plain fact of the matter is that Governments just cannot afford to pay every single rettired person what the Basic State pension and pension credits amounts to. And until such time as Governments start managing pension funds like the private sector and put up compulsory NI contributions to match, the current system is probably the best we can hope for.

As for not being able to afford to go on holiday since you retired, I couldn’t afford to go on holiday very often when I was working full-time either! In fact, in the eleven years before I retired, all I could afford was a cheap two week holiday to Majorca once and a week staying with a friend in Alicante! So if I couldn’t afford regular holidays when I was working, why should I expect to be able to take regular holidays now, when I’m living on a State Pension? I just don’t think that people like Richard have ever really known how the other half have always had to live!

Sadly I fundamentally disagree with all of your theories – from “this is the best we can do” – downwards. Typical Condem propaganda,

Sadly – I’m 80 and know all about bad living conditions – I am a German Jew from East Berlin – In 1936 my 3 immediate family and myself after serious consideration – decided to move to France where we were not very welcome – The rest of my 73 extended family actually disagreed and did not – they did not survive the war for obvious reasons – In 1939 we 4 were forced to walk to the coast basically living on road kill (it was also a bit noisy) – and managed to get to England. To you it may have been a breeze – but to me and my family it was traumatic.

I was nearly 10 and was so grateful for the UK welcome given – I subconsciously dedicated my life to helping the less fortunate than myself in the UK – That included understanding the “poor law means tests” that inflicted the poor and vulnerable until the Welfare State in 1948 did away with them. Sadly as a “youngster” you would have no idea how hated such poor laws were. As an 18 year old I did from the people I was helping – decorating and home repairs. We spent hours reminiscing about how bad it was before the war- and how much better in 1948

Many pensioners now – especially those that had fought for their country and are proud and independent – They were PROMISED a living pension and “homes for heroes” in a welfare state with “care from cradle to grave” That there are millions of these pensioners who are still proud and independent show how wrong you are – They want what was promised.

The Pension should be a living wage as a right not an afterthought!

In addition – I have run Youth Clubs – Scouts – Cubs – in deprived areas so I know from experience how the poor really lives – Also I have taught in a slum area – in slum schools where I not only acted as a character witness for ‘my’ children in court and know all about how conditions and poverty caused the attitudes. Many could not go on holiday EVER. I used to visit them to help. Even now I go to my local Pensioner Club to help those who cannot cope in some way

So I know all about how the other half have always had to live – I’m not too sure you empathise!

My husband and I have recently retired so have very mean pensions on top of the state pension to look forward to. I paid the married woman’s stamp and consequently get the minimum amount of state pension. We have to continue to run a family business in order to actually survive in any degree of comfort, much as I would like to give it up. I accept that this is how it will be. We want to go on holidays for longer and to different places, while we are fit enough to do so. We want to continue goingt to the gym twice a week while we can still afford it. We pay taxes, always have, so the only thing that gets me downright furious is those complacent idiots who think that ‘we have it so good’—no, we don’t. What we’ve got, we earned,and we are entitled to have a standard of life that WE find acceptable.

Susan says:
28 April 2011

Richard, you say you disagree with all my theories from “this is the best we can do” down? But I did not say that this is the best we CAN do! On the contrary, I said that until such time as Governments start managing pension funds like the private sector and put up compulsory NI contributions to match, the current system is probably the best we can hope for. In other words, I believe that if Government ran the State Pension fund like a proper company, we could indeed do a lot better.

And I know that many older pensioners, especially those that had fought for their country, are proud and independent because that is the way they were brought up to be. And I believe that as you say, they were promised a living pension and care from cradle to grave – but I don’t know when exactly that promise was made? But unfortunately, although the Government obviously made that promise at some point, they could not possibly have predicted what the financial situation would be like 50-60 years on, could they? So in the current financial situation, do you think then that the Government should keep borrowing money ad infinitum regardless of the consequences, so they can pay every single pensioner across the board, whether they have worked all their lives or never worked at all, a pension that allows them to take regular holidays, go out for meals or to the theatre occasionally and perhaps even run a car? Because I certainly don’t! I could never afford those things even when I worked full time. But I do think that Government should manage their funds a lot better and cut benefits of all those whose won’t (not can’t) work before they cut the pensions of all those who have worked all their lives and who may have fought for their country!

As for your early life as a German Jew in East Berlin, Richard, of course I empathise with the emense human tragedy that caused you and the millions of other Jews that were tortured and killed by that murdering maniac Hitler – because my father was Jewish and his parents were hounded out of Russia and fled to England themselves in the early 1900’s!

Many elderly people are encouraged to buy life and/or other insurance to pay death taxes on their homes or to protect their homes from terminal care fees. At present, the trusts associated with such insurance makes it possible to avoid these charges. However this may not always be the case if the government finds it is not getting the funds to which it feels entitled, or is paying out too much in terminal care benefits.

However at present the benefits to the next generation of people buying life insurance are clear. They are used extensively to sell life insurance. It may well be that the real evil of death taxes is not the fact that people receive a smaller inheritance, but the fact that some elderly people have a significantly reduced standard of living because of the burden of the premiums.

It is worse – Remember if the OAP goes into long term care – all their assets including homes will be used to PAY for that care until the OAP dies or becomes a pauper. So then no inheritance tax to pay – no inheritance!

hannah says:
8 June 2013

I have a problem with weight it fluctuates wildly forcing me to buy clothes that will fit me My shoe size has also increased I,m a pensioner and on a fixed income any extra problem is a nightmare I can only see suicide as a way out but the Health and Safety brigade have made sure none of us get that privilege In my aun,ts days a bottle of sleeping tabs and some alcohol did the trick Nowadays i think the government especially this one would rather see us sleeping on the streets and being used as a football for Muslim gangs God help us all is all i can say People with money can count themselves lucky all the rest of us can do is pray Say one for me i don,t have one left