Age UK Budget reaction

Some weeks ago Age UK submitted evidence to the Treasury ahead of the Budget, outlining our key Budget priorities for later life. While we’ve had some good news today, the Chancellor’s response – or silence – in other areas left our ‘wish list’ largely unfulfilled.

The highlight today for Age UK was the hint that the Government will introduce a simple flat-rate state pension of around £140 a week. This will be great news for those who receive it – we’ve been calling for a simpler, better single State Pension for many years. But as always, the devil is in the detail. We didn’t hear today when this pension is going to be implemented, and we know from the Chancellor’s statement that it won’t apply to those currently in receipt of State Pension. With 1.8 million older people living in poverty in the UK today, we believe that more needs to be done to tackle pensioner poverty now.

Future increases to the State Pension Age past 66 will now to be determined by an automatic process, according to today’s Budget statement. While we accept that the State Pension Age will have to increase periodically to take account of welcome increases in life expectancy, simplistic indexation is not the answer. In particular, it’s essential that any increase isn’t based solely on average life expectancy, as health inequalities mean that life expectancy varies wildly across the UK. Any new uprating must also take into account the impact changes will have on the poorest, those out of work and those with health problems or disabilities.

After spending years campaigning for an end to age discrimination, it was disheartening today to see the postponement of new age equality provisions for small businesses. We’ve been promised that this will not include the ending of the Default Retirement Age, which will begin to be phased out from April, but it will water down the banning of age discrimination in the provision of goods and services. Age equality makes economic sense, and older consumers’ spending will be key in reducing the deficit, so we would have liked to see more Government support to help small businesses adapt to the changes, rather than abandoning them.

Finally, there were areas where the Budget said nothing, where action was urgently needed. We already know that adult social care is going to be badly hit from April, as we hear news of local government cuts. We asked the Chancellor to channel any extra money he could find to top up support for care users who are among the most dependent in society. Yet while there was a little extra for other favoured projects – money for councils to fill potholes among them – there was nothing to see off the looming crisis in care.

Read more coverage of the Budget on the main Age UK site

Author: Andrew Harrop

Director of Policy and Public Affairs, Age UK

24 thoughts on “Age UK Budget reaction”

  1. You have not mentioned the diabolocal reduction (carefully hidden in the budget details) that the winter fuel allowance this year will be reduced by no less than £100 for the over eighties to £300 (from £400). We can barely meet the current bills! The cold hits everyone in extreme old age. Perhaps they would like to get rid of us quickly and save benefits, statepensions et al.

  2. This policy has the potential to create a hugely unfair system.
    65th birthday on a Friday – get paid £96.00 a week.
    65th birthday on the following Monday – get paid £140.00
    If the government really think people who have paid taxes all their lives are going to sit by and be treated like this, they are even more divorced from reality than usual.
    I have never marched on Parliament, but am willing to do so over this misguided and deeply unfair policy…………………….

    1. Well how about some people power. It seems highly unfair to me and is age discrimination. There are lots of pensioners in this country affected by this, they need somebody/bodies to organise a campaign.

  3. my pension 186 my wifes £60 pluspension credit £9 80 total256 59 coucil tax paid£12 a month for band C in droylsden this year my pention £193 wife £63 52 pention credit £8 72 council tax gone up to £30 a month WHY



    1. My husband paid in for 45 years and will not receive the proposed £140. Is the government relying on people not getting together to object to this? Will they be right about that. Its up to the pensioners to kick up more than a fuss about this.

  6. Jean, the main thing is that the Government retained the core winter fuel payment, but we know that many of you are very disappointed that the extra payments aren’t going to be renewed.

    The uplift that was brought in 2008 was always billed as a temporary measure for those older people who are struggling to pay fuel bills, but we’re aware that most of you will view the measure as a cut.

    We will continue to campaign on behalf of older people to make sure that the most vulnerable older people don’t die needlessly during the winter months.

  7. hello….i care for my father who is 84 and has alzheimers. I have a sitter for 3hrs a week from our local ageuk and im told they dont know wether they have any funding from goverment to carry on this service.Does the goverment realise how much carers like me save them year on year by looking after our realatives at home, but we do need a support system in place for us,after all you do give up 99% of your life to look after someone full time,and i do need my 3hrs off every week…it keeps me sane, please advise me on the situation. thankyou

    1. Christine, we can’t speak for the Government, but it might help to call our Information and Advice line on 0800 169 6565 – they’ll be able to advise you of any extra benefits you may be entitled to, as well as other possible support in your area.

  8. Losers in new pension proposals: Any current pensioner like myself with 3 top-ups, small occupational pension, these are all counted to my total income with takes me just above the amount we need to live on etc. If new pensioners get the flat rate, they will benefit from keeping all their occ.pension. I don’t as this is counted towards the amount others get to pension My actual state pension (with top-ups) is £128.13, add in occ.pension and I don,t qualify for g.crdit. Can’t apply for budget loan, crisis loan, grant and have to pay some Council Tax, Rent, Opticians, dentist, fares to hospitals etc. Lets remember I don’t benefit in any way from my occ.pension. Why did I bother to work, the government just take it from me and those who don’t work will be laughing all the way to the bank!

  9. The new proposal to increase the state pension to £155 is discriminatory and devisive. Older pensioners drawing their pensions before 2015 will be discriminated against. Not only that they will have paid NI contributions for more of their working lives than those retiring with the new pension.

    1. All of you affected should raise the roof about this. My husband paid in for 45 years, he is not expecting more than others but to get less is an insult.

  10. Come on Age UK. We look to you to redress the balance. The government refusal to extend the proposed pension increase to existing pensioners is scandalous. Work all your life and get SERPS and pension of £142.00 pw andhave a small occupational pension as well enough to take you out of all benefits and then watch those with £1m per annum pensions (bankers and leaders of industry) pick up £155pw state pension as well. Also the £1000 rise in tax personal allowance was not given to the over 65’s a point that most pensioners have not noticed. We have lost £160pa in tax reduction and now face losing £2500pa in pension.
    “We are all in this together”………..except if over 65 in which case you are not and can subsidise the the rest of us.

  11. Come on, are you really surprised that the government is attempting to cheat ‘baby-boomers’?

    We are too many. The demographics say that if you bribe all post 2015 pensioners with a miserable £155 a week, then you can steal the balance from existing pensioners who will be either too doolally or too enmeshed in the means tested benefits system to care. Some will do their bit and dutifully die.

    Now is the time to protest, not in a few years when other austerity measures will make this seem pale in comparison to the general public, whose support is necessary.

    Age UK must take the lead in this most blatant of treacheries. One group of state pensioners cannot be treated differently to another for the sake of expediency and a jolly nice politically useful soundbite. Those of us who are affected should get off our fat (ok, rotund) behinds and fight this now. Unless we are organised under a national banner, any protest is likely to fall apart, and Age UK should be that banner. If not, then what is the point of Age UK?

    To the barricades – at least metaphorically. We cannot let them get away with this.

  12. I think it is dreadful the way we are treated and even more so now, we should get up a petition or something surely, they are always telling us the grey vote counts well surely never more so than now and as Age UK is for us oldies they should surely be leading from the front, the media already tell us it is our fault the country is in such a mess as we apparently spent all the money, I don’t know about anyone else but I must have missed that bus, I don’t remember foreign holidays or new furniture when first married, I was born 30 years too early methinks. Come on AGE UK lets get the party started

  13. Couldn’t agree more John, it is highly unfair to do this. Many people affected do not have the voice or resources to do anything about it. Can Age UK help in this or direct those who are capable to fight for their rights and the rights of those unable to fight for themselves?

  14. Until happening upon AgeUK blog, I could find hardly any protest about the massive inequality the Government will create by bringing in a set rate of £140 per week.for younger pensioners whilst leaving older pensioners in penury. This is outrageously unfair and I cannot believe the Government can get away with it. I simply dont believe they have thought this through at all, which doesn’t surprise me!! A campaign needs to be mounted (by AgeUK?), pensioners need to march, lobby their MPS, and generally make their protest heard till this unspeakable Government comes to their senses( if they ever had any.)

  15. I have worked since I was 15, paid full national insurance contributions, not relied on state payouts, tried to save moderately from a small wage. I would have been eligible for carers allowance as I have a disabled daughter but took employment so that my husband was at home to care when I was not. I retired at 60 a few years ago and claim a full state pension (I cant claim carers allowance even though my daughter has been assessed as needing 24 hour support by social services because I am over 60 and claiming state pension). I will not be eligible for £140 per week state pension
    The government want to treat women fairly, encourage saving and for people to take employment rather than rely on state benefits, I am very disappointed to say this but if I was a young person I would be asking what is the point. Totally unfair and unjust.

  16. The government claim they now want to encourage saving.
    We won’t bother asking if that means they were discouraging it before.
    As a formerly self-employed person I often lived below my apparent means because I disciplined myself to save for a buffer to have in my later years. I did not have the benefit of a company pension scheme with company contributions, so it’ll be a Basic state pension, a trivial personal pension income and enough savings to make sure I can’t get any means tested benefits.
    I should also mention that when the qualification to receive 100% of the State Pension was 40 years NI contributions I fell short, so paid several hundred pounds to cover the shortfall. Just after I had paid it the qualifying years were reduced from 40 to 30. Got me again.
    Well, I’m almost there, 65 next year. I will be locked into the current scheme of Basic Pension £97.65 plus means tested benefits which as I mentioned will be nil because I saved up without any incentivisation from the Government but rather because of the negative incentive of abject poverty.
    If only I had been born in1950. I would qualify for the New Pension of £140 or possibly £155
    We are talking about 42% or 51% extra.
    Some people are going to miss this by days. Existing pensioners can forget it.
    In less than 4 years we will have a two tier class of pensioner. Worse still the benefits will be inversely proportional to fairness. The years of NI paid in will count for nothing. Any savings existing pensioners have will still count against them. New pensioners pay will be unaffected by savings. To cap it all existing pensioners are older and hence need more to pay for jobs they can no longer do.
    If this is true why would our elected Government execute such a betrayal? Simple, it costs about half a billion pounds to do this and about 7 billion to include existing pensioners. It’s all about money as usual not fair play.
    When Bill Turnbull (BBC 1Breakfast ) put this disparity to the Spokesman for the pensions review, he replied, “existing pensioners will be better off by 15000.” No explanation was made about this figure.
    Bill repeated the question to be told existing pensioners would in future benefit from earnings related increases. (CPI rather than RPI.*)
    Bill said “You keep missing the point” and again asked him directly, “What about this big difference at the point when the change is introduced” The Spokesman’s reply, The existing Pensioners will benefit from earnings related increases.
    Perhaps when he said the existing Pensioners will be better off by 15000 he was referring to the date.
    It would take until April 15000 to catch up.
    Do I have an answer? Well, there’s one thing that occurs to me, did anyone ever expect an overnight increase in pensions of 51%. No of course not. In that case, instead of giving a 51% higher pension to some Pensioners over others in 2015.
    Perhaps 1) Put the change date further back
    2) Cap the change-over increase for New scheme entrants
    3) Use the saving to give closer parity (maintain max. 10% differential in the intervening years.
    It’s no wonder that some elderly people view their inevitable death as an escape from their financial difficulties.
    Despite the convenience of it being similarly a solution to the governments financial difficulties , let’s hope our politicians revise their thinking to implement a more humane solution.
    On the other hand we could all unite to vote for whoever will champion our cause. The prospect of losing their political seat does seem to help politicians focus.

    *My understanding is that RPI has exceeded the proposed CPI on all but one occasion since 2000 meaning a change to CPI indexation would actually be a less effective inflationary hedge for Pensions?

  17. This government was elected on a platform of Fairness and Justice for all. What is fair about discriminating against the most vulnerable group.
    The trouble with this group is of course the same as many other people in our society. They are apathetic. I have spoken to many pensioners who will be affected by it and though some are not capable of doing anything about it, most just cannot be bothered and want someone else to do it for them, so perhaps if we want to make a difference perhaps we have to accept this and write petitions which they can just sign.Most pensioners of the affected age group do not go on line. We need to work out how to get through to them and get the government the realise the voting power of pensioners. There is enough of us .

  18. Hello,
    At last I have found some way in which I can make my feelings known with regard to the iniquitous inequality in pension provision which will come into force if the Government is allowed to push this plan through. How can we make our feelings known?
    Presumably Age UK will be launching a campaign to attempt to challenge this! Please publicise it – everybody I know who is an ‘older pensioner’ is absolutely staggered that this could happen. If there is now acceptance that the State pension is woefully inadequate, how can it possibly be thought to be adequate for ‘older’ pensioners? I thought I was hearing things when I heard it being discussed on a recent Radio 4 programme.
    Your advice on how to make our feelings known would be greatly appreciated. We might be past the first flush of youth, but we are not stupid!
    I still have enough intelligence to choose carefully where to put my X at the next election. Now is an ideal time for for your most excellent organisation to prove how strong & effective it is. As such a sizeable sector of society, surely we can do something. With some guidance from an organisation such as yours, we can make our voice heard. Come on, Age UK.,mward let’s prove that we needn’t be walked over. Thank you very much for giving me the chance to make my point.

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