They earn more, their biggest assets are sheltered from tax, and they already got their way on Brexit.
Can we please stop the hand outs to pensioners?
OK, I realise this makes me sound a bit like one of King Lear’s daughters. For the benefit of doubt, I’m not suggesting we turf the elderly out of nursing homes and redivert the savings into Millennial Fun Funds. I’m talking about Labour’s new policy.
Labour has unveiled a “pensioner’s pledge” that includes a commitment to the triple lock on pensions (more about that later), compensation for women affected by state pension age changes and the winter fuel allowance.
I admit that, by targeting those most likely to vote, the opposition party is finally doing something politically canny. But it makes Philip Hammond, seem intergenerationally progressive. At least the Tory Chancellor has floated the idea that the triple lock might be a little unfair on the younger, poorer taxpayers.
Pensioner poverty used to be a scandal. For those unable to work who are reliant on the state pension, and unlucky enough to be in private renting, it still is. But those retirees are in a minority. Today’s typical pensioner households are now £20 a week better off than typical working age households, according to the Resolution Foundation, once housing costs are taken into account. They are also increasingly fit, healthy and in work (for some truly stupendously fit pensioners, see my colleague Xan’s feature on octogenarian mountain climbers). Rupert Murdoch is 86. Paul Dacre is 68. Donald Trump, if he lived in London, could get a free bus pass.
In 1981, pensioners were less likely to own their own homes than younger generations. In 2011-12, they were among the most likely. More than seven in ten over 65s were homeowners, compared to just four in ten aged 25 to 34.
And well done to them. I’m not one to begrudge a well-timed birth, nor an individual’s decision to take advantage of the right to buy scheme (even if I think the policy overall is a disaster). What grates is the fact that at the same time the government preserves resources for pensioners, working-age benefits are for the chop.
The triple lock is a perfect example of this. Since 2010, the government has kept to a pledge to raise the state pension by 2.5 per cent, the rate of inflation, or average earnings, whichever is highest.
Meanwhile, the government has imposed a freeze on working age benefits. The Institute for Fiscal Studies predicts that, if inflation rises as expected, the value of frozen benefits will fall by 6 per cent by the end of the decade. The Resolution Foundation predicts the poorest households will see their income drop by as much as 15 per cent.
As for housing policy, the latest government has finally woken up to the scale of the crisis for younger generations, but so far no politician has dared do more than tinker round the edges of property taxes. The average landlord is 55 or older.
Nor can younger workers of today expect the same level of retirement support as pensioners do today. A government-commissioned review on pensions has backed moving the state pension age to 68. Throw in the fact that workplace pensions have become stingier, and Royal London estimates a 22 year old will have to work to 77 to enjoy the kind of retirement their grandparents have today.
Some pensioners will always need extra financial support from the state to live a comfortable life. Perhaps they are unable to work because of illness or disability. Perhaps their partner, the main breadwinner, died. But this happens to working-age people too – and they’re losing that support. We need a fairer welfare state. Expanding the triple lock to include all generations would be a good way to start it.
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