Last week Age UK launched the second edition of its Economic Tracker. This addition includes the result of the first wave of a survey we have developed to track older peoples’ views on the economy and their financial situation.
It received quite a lot of coverage in the media, particularly because of the startling statistic the nearly a quarter of people in their early 50s were worried about losing their home as a result of falling behind with mortgage repayments. Like other age groups many older people are suffering a fall in income in the current period of austerity and this is having an impact on their well-being.
Over three million people aged 50+ are very worried about the cost of living. This is in the context of rapidly increasing prices for some essential items, especially utilities, which we know have a significant impact on older people’s finances.
Only thirty-eight per cent of 50+ say the future looks good for them
35% feel worse off financially compared to last year (see chart below)
Since our first edition, the UK economy and economic policy have given us food for thought. There are concerns, disappointments, and one or two silver linings. As our polling data suggests the economic situation is particularly worrying for many of those approaching retirement, tomorrow’s pensioners, who find it more difficult to find a job following redundancy. Our analysis has found that older workers are more likely to be made redundant when compared to those aged between 24 – 49. This translates into higher proportions of older unemployed workers being out of work for longer. Forty-seven per cent of unemployed people aged 50 – 64 have been out of work for 12 months or more compared to thirty-seven per cent of people aged between 25 and 49. The situation of older people is not as bad as those between 16 – 24, but it is important to highlight that all ages are struggling in these tough economic times.
Quite rightly there is a lot of attention on the young unemployed at the moment, but we must ensure that those over 50 are not forgotten. More can be done by the Government and employers to recognise the value of workers over 50 (the experience and skills that come with a longer working life), provide more training and learning for those in later life, and do more to eliminate the ageism that too often occurs in workplaces.
We have heard a lot lately from various politicians about the need to examine the universal benefits received by older people and in particular the concessionary bus pass. It seems that in the age of austerity, even something that has been so successful and proved so popular, is subject to review.
But it is not just the threat from government to withdraw the bus pass from all but the poorest, there is also the threat to bus funding from the imminent spending review. Cuts to bus services will hit the poorest and most vulnerable the hardest.
Winter fuel paymentsare in the news yet again. I have lost count of the number of reports and media articles I have read about why these should be reformed and how the money could be better used to cut the deficit or transform our failing system of care or solve some other crisis. And please don’t tell me again that millionaires don’t need a winter fuel payment or a bus pass. Of course not – but let’s make policy changes based on the position of majority of older people not the small minority who are very rich. (when the Deputy Prime Minister pointed out last year that Alan Sugar didn’t need a bus pass Lord Sugar tweeted in no uncertain terms that he doesn’t have one!).
So should we be looking at restricting universal payments to the less well off? It has been suggested that they should just go to people receiving Pension Credit. However that would mean that up to 1.6 million of the poorest older people would miss out because they are not claiming the Pension Credit they are entitled to. The big advantage of universal payments is that they reach everyone including those do not take up means-tested benefits. They also provide some extra help to the ‘not rich but not poor’ group who can feel because they made sacrifices during their working lives they miss out on benefits and are penalised for having saved. Continue reading “Winter fuel payments again……”
When Andrew Dilnot published his proposals on funding social care, he envisaged that a better, fairer system would require extra funding from public expenditure, and observed that since older people would be the principal beneficiaries, it would be preferable if this was raised by taxes which older people contribute to so that not all the cost would fall on the younger population.
Since then, a variety of ideas have been floated from a range of different quarters. But the discussion has also become conflated with views about intergenerational fairness as the Government tries to bear down on public spending, and comments about the ‘generosity’ of some universal benefits received by pensioners. There has long been a rumble of complaint that rich pensioners receive the Winter Fuel Payment. Frank Field waded in, arguing that before we find more money for older people, we should be looking at the poverty and the shortage of opportunities for children. The Lib Dem think tank CentreForum published a paper looking at the tax reliefs available to older people and their exemption from National Insurance if they are working over State Pension Age. Now, in the margins of the Lib Dem and Labour Conferences, the appropriateness of pensioners’ benefits has again bubbled up, though the Coalition Agreement specifically protects these till 2015. Continue reading “Squeezing the rich pensioners”
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.