Could older people's benefits be next for welfare cuts?

 
Older women having lunch on a bench Older people's benefits have largely escaped austerity cuts

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They receive around half of the government's welfare budget but so far older people have largely dodged the austerity bullet.

Unlike working age benefits, their pensions will go up by at least the rate of inflation for the next few years.

While child benefit is now means tested, bus passes, free TV licences and winter fuel payments still go to pensioners regardless of their income.

And that looks likely to remain the case until at least 2015.

Share the pain

But there have been murmurs on all political sides about whether older people should continue to enjoy protected status beyond the next election.

There may well be working age benefit and tax credit claimants who think it is right that older people share more of the pain.

The Institute for Fiscal Studies estimates means testing the help older people get for fuel and their TV licences could save £1.6bn alone.

And some older people are already sacrificing those benefits.

Start Quote

Sir John Hall

We don't need those benefits. We are comfortable, and there are many people like us”

End Quote Sir John Hall Former Newcastle United owner

Former Newcastle United owner Sir John Hall is a millionaire, living in the luxurious County Durham hotel he owns.

And yet the 79-year-old is entitled to free prescriptions, a state pension, a £200 winter fuel allowance, a bus pass and a free TV licence.

He acknowledges they are benefits he doesn't need.

He said: "We have paid the £200 fuel allowance each year to the Durham Foundation. They collect it from as many people as are willing and then distribute it to those who need it more than we do.

"I do not have a bus pass, and I think we pay the TV licence. We don't need those benefits. We are comfortable, and there are many people like us."

Ration benefits

Sir John's money then has ended up subsidising a lunch club for older men in Shildon in County Durham.

They're certainly not millionaires, and many believe it's time to ration those benefits to those who really need them.

Vernon Chapman said: "Nowadays this country's got more millionaires in it but they will still be getting all the entitlements when they do not need them."

And Richard Wheatley said: "There should be a guide, a level beyond which the payments are cut-off, say those getting more than £40,000 to £50,000-a-year."

But what about those pensioners who are reasonably comfortable but well short of Sir John Hall's status?

Older men's lunch club Some believe older people's benefits should be targeted at the less well-off

I caught up with some at the Tyneside Cinema's Silver Screen club in Newcastle. Most certainly don't consider they are wealthy. They are reluctant to see their benefits targeted.

John Goss said: "I do not consider myself to be wealthy at all. I do not think expats in their villas in the south of France should get a winter fuel payment. On the other hand why shouldn't I get it?"

Ray Garside agreed: "I think it is very hard to say because we are fairly comfortable we should not be getting these allowances when it's due to our efforts that we are in this position."

But Ray's wife Doreen does think there is some scope for sacrifices to help younger people.

She said: "Our generation has been lucky. They have been able to buy their house, they have seen them go up in value, and paid their mortgages off.

"They have got a working pension and a state pension so I feel that we are quite privileged."

Economic turbulence

Start Quote

Ray Garside

I think it is very hard to say because we are fairly comfortable we should not be getting these allowances”

End Quote Ray Garside

But although older people have seen many of their benefits protected they have not been left entirely untouched by recession.

Many private pensions have been badly affected by economic turbulence, annuities have been cut, and savings are earning pitiful amounts of interest.

In addition, studies suggest older people are much more vulnerable to inflation.

The argument for protecting older people has also been based on their inability to change their circumstances.

While those of working age can hope to get a job to get out of the benefit system, it is harder for older people.

And of course many have paid decades of taxes on the basis they could benefit when they retired only to see their savings eaten up by care costs.

But perhaps some may be able to work longer in order to support themselves and generate more taxes.

Paul Hancox, from Wallsend, in Tyneside, would certainly like that opportunity. He may be 66 but he still wants to carry on working as a marine engineer.

So far opportunities have been few and far between.

He said: "Employers are not supposed to discriminate on the grounds of age but you do not know what they are saying at HR.

"They might ask, is he going to have a heart attack when he's working for us, is he going to get ill? You can see the challenge for the employer."

Of course many more of us will be forced to work longer as the pension age begins to rise.

But it does seem increasingly likely that benefits for the current older generation will be scrutinised more closely beyond 2015, especially as more cuts to public spending seem likely.

Given older people currently get £200bn from the public purse, the temptation to eat in to that will be great.

But politicians may still tread a little carefully. There's one thing all older people have in common - they're the most likely to vote in elections.

 
Richard Moss, Political editor, North East & Cumbria Article written by Richard Moss Richard Moss Political editor, North East & Cumbria

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  • rate this
    0

    Comment number 88.

    We were not told this report we took part in was headed by a millionaire talking of giving up winter fuel allowance. Clever use of edited clips juxtaposing Ray with the millionaire, missing out 95% of what he said so looks like he's a wealthy pensioner who doesn't care about those on state pension only.I do paid and voluntary work so not an honest reflection of our position.Travel passes important

  • rate this
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    Comment number 87.

    "ciconia"
    Fair enough if I have misunderstood but I believe myself and my family struggle. We don't get much to be honest , just enough to live on. My main problem is with the government really. Yes I understand that pensioners have had hard times too. Luckily for me I had a grandmother who taught me how to cook home cooked food, bless her.
    Can never get my scones right though hers were the best

  • rate this
    0

    Comment number 86.

    #85
    Fine bollywood, taxpayer pays for your degree course, even if you pay a bit back, or for my pension?
    My comment, 'are you ready..?' was a reference to your misunderstanding of pensioner entitlements to benefits. I had no wish to offend you.
    Pensioners aren't getting much in the way of special treatment, and they pay taxes too.
    We never dreamed of the benefits now available to you.

  • rate this
    0

    Comment number 85.

    "ciconia"
    Why shouldn't I study for a degree?
    I will have to pay it back if I go back to work, also I am aware that some pensioners are struggling , I just think it is unfair that the government seem to be making sure pensioners are protected from certain things yet others have to pay, this is not me having a go , I just think certain choices the government make are wrong thats all

  • rate this
    0

    Comment number 84.

    My blood boils with every weasel letter that refers to my state pension as benefit, as if I get it because I can't support myself.
    Wrong.
    The pension was a compulsory part of National Insurance, reduced by incomplete years. My late wife only received 2/3rds because of this.
    And yes we have a moral duty to provide a benefits safety net, but not to fund personal lifestyle choices.

 

Comments 5 of 88

 

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