PENSIONSANDSAVINGS.COM

• BALANCING THE NATION’S BOOKS ON THE BACKS OF LOW INCOME PENSIONERS IS THE WRONG POLITICAL CHOICE – A PROPER IMPACT ASSESSMENT IS NEEDED.
  
• Pensioners may take the Government line – ‘I can’t afford heating so I can’t turn it on’, putting them at risk of illness and increasing pressure on health and care services.
  
• Proper detailed review needed – targeting the poorest with means-testing is impossible and the cliff-edge leaves those just above the threshold much poorer than others who qualify.
  

Many angry pensioners feeling let down – £300 is a significant amount of money to them: Pensioners are understandably angry at the sudden announcement that their Winter Fuel Payments will not be paid in a few weeks’ time, as expected. Of course, some can manage fine without, but millions can’t. This is not the way to fix the nation’s budget, yet there seems to be a determination to try to balance the nation’s books on the backs of pensioners. There should be a considered review of all aspects of how this country supports its elderly citizens, before making this kind of draconian change.  £300 does not sound like much to most of us, but for pensioners it is significant.

No warning of money taken away – 3.3% income cut for over-80s: Taking away the Winter Fuel Payments, with no warning or time to prepare and no apparent consideration for the groups just above, or not claiming, means tested benefits, just 12 weeks before the money was expected, is a classic example of the wrong-headed thinking about older people. It actually represents a 3.3% reduction in Government benefit to the over-80s on Basic State Pension.

Of course some pensioners are well off but millions are not – if they can’t afford heating they will keep it off, risking their health: Tarring the poorer pensioners, with a brush that only fits the better-off, will create more pensioner poverty. It also risks those pensioners who cannot afford to heat their homes adequately (elderly people need to keep much warmer than the young) adopting the same mantra as was used to justify this decision in the first place. The Treasury says ‘if we can’t afford it, we can’t pay it’. Pensioners may well be forced to say the same about turning on their heating ‘I can’t afford it, so I can’t do it’ and then their health will suffer. Many have no buffers to meet sudden unexpected costs, let alone to cope with a significant cut in the income they were expecting to be paid in a few weeks’ time, just as energy bills start rising again. This will increase strains on the NHS, add to pressure on GPs and local councils may need to help more people with care, costing taxpayers more.

Oldest pensioners are mostly women and many of this generation don’t claim means-tested entitlements: The pensioner population, especially among the very elderly, has a wide distribution of incomes, with the most elderly (predominantly widows or single women) generally having particularly low incomes. Just relying on a means-test to identify those struggling to make ends meet is seriously flawed. Even now, after much effort to increase take up of means-tested Pension Credit, 800,000 pensioners eligible for help, fail to claim. In addition, those who are not much above the means-test threshold – some 2 million perhaps – are far poorer than those pensioners who do receive the benefit, as they do not get the extra money that the means-test entitles them to, such as housing and council tax payments, free eye tests, cold weather payments and so on.

‘Death by a thousand cuts’ approach to pensioner benefits reflects short-term thinking, but pensioners need long-term planning:  In recent years, pensioner benefits have been cut in several ways, despite the much-vaunted ‘triple lock’ protection. For example, Pension Credit age was sharply increased, free TV licences were withdrawn, meals-on-wheels local services have been scrapped and now the latest Winter Fuel Payments decision – without any warning at all – is a classic example of misguided social policy for pensioners.

Pensioners have been fobbed off for years with ‘freebie’ add-ons, as political gimmicks: Every so often, politicians have announced new pensioner benefits every so often, to make up for the fact that the UK pays such a low state pension compared with other countries. Politicians wanted some political kudos from signalling support for pensioners. But, rather than just paying a higher state pension, they preferred the positive headlines of a new benefit that could be rolled out with plenty of fanfare, as marvellous new help for pensioners.

Each extra benefit has been tax-free and administered separately, adding to the cost:  These add-ons, such as bus passes, prescriptions, winter fuel payments and so on, have become part of pensioner budgets. Pensioners often rely on these benefits, such as Winter Fuel Payment, which have been in place since 1997. Unfortunately, unlike the state pension itself, the extra add-on pensioner ‘benefits in kind’ have tended to be tax-free, making them unnecessarily costly to the public purse. Taxing them or consolidating the money into a better state pension should be considered as a radical reform.

New rumours suggest free bus passes may be withdrawn for pensioners too:  Again such a blanket move would cause problems. Certainly a case can be made for restricting free bus passes, such as not allowing peak-time rush hour travel, or increasing the minimum age of 60, But subsidising off-peak travel, when services would have plenty of free spaces, can help encourage pensioners to get out and about, which has health benefits too. Public transport is more eco-friendly as well as often better suited to those who don’t drive.

Time for a proper review of all pensioner benefits: Changes to pensioner benefits need to be based on a full impact statement, with detailed research on the effect of sudden withdrawal on those with lower incomes. Surely it is time for an independent or cross-party review of all aspects of pensioner support. Meanwhile, the Winter Fuel decision should be reconsidered urgently.