It seems incredible that, in the name of cost saving and to prevent a few well off pensioners from receiving some pretty modest benefits, ministers can be entertaining the idea of extending means-testing.
Making people apply for benefits they are entitled to is notoriously inefficient. Pension Credit is not claimed by about 30 per cent of those eligible and Council Tax Benefit by about 40 per cent. When Gordon Brown refused to increase the state pension above the rate of inflation (with a freakish inflation figure in 1999 leading to a 75p increase), he argued that a means-tested Pension Credit was the efficient answer.
However, even he exercised a balance, by making the Winter Fuel Payments universal and restricting the free TV licence to the oldest – who are demonstrably the poorest part of our none-too-wealthy older population, and of course a means-tested claim costs ten times as much to process as an automatic one.
Bizarrely this proposal is surfacing as the ONS publish figures on the poverty risk facing older people ion the UK and the EU. It turns out, according to their figures, that older people in the UK are faring worse than their counterparts in most of the rest of Europe.
There are more than enough poor pensioners struggling with energy bills and food price inflation to maintain some parts of our benefit system which actually get help to them.
Some older celebrities were proud to proclaim last winter that they were donating their Winter Fuel Payment to charity – that is fine and that is their right. It is hard to imagine many of the seriously rich pensioners on the buses with their passes.
Recent reforms to our state pension system are producing small improvements (and rather slowly), but overall the public expenditure on pensions and pensioners’ benefits in the UK is very low. No surprise, then, that barely half of our older population pay income tax, and less than 4 per cent come into the higher rate tax bracket.
Impoverished pensioners come at a cost to society. Cold homes are dangerous places, and the last Chief Medical Officer reckoned the cost of cold related illnesses to the NHS was nearly £1bn. Pensioners maintain their independence by using their bus passes, visiting friends, shopping around for bargains, and of course helping their families – if they were more dependent, they would be adding seriously to our already struggling social services.
Older people face a maze of inter-connected and overlapping benefits, the thresholds change every year, and they need help to understand their claim. Many give up on the process altogether. It really is the most cumbersome way to provide basic and fundamental support to people who felt they enjoyed a contract with society. They paid their due debts and taxes, and the state in return provides support.
The problem is not the handful of rich pensioners who are entitled to benefits, but the large numbers of poor pensioners who miss out.
Last year Age UK’s More Money in Your Pocket campaign helped 500,000 people put £120 million back in their pockets through free benefits information and advice. This year, we will continue to break down the barriers that prevent people from claiming. For more information, please visit www.ageuk.org.uk/moremoney