Curbing pensioner benefits could help the young, says report

https://www.theguardian.com/inequality/2019/apr/25/curbing-pensioner-benefits-could-help-the-young-says-report

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Free TV licences for over-75s should be scrapped, the age threshold for free bus passes raised and the triple-lock on pensions abolished to close the widening gap between young and old in Britain, according to a Lords report.

The House of Lords committee on intergenerational fairness and provision said it was time to rebalance government policy in favour of the young, to remove the risk of the social bonds between generations fraying further.

For reasons of fairness and because many pensioner households across the UK have become better off on average than many working-age families, it called on ministers to curb several benefits targeted at older Britons.

The report said the triple-lock – which raises state pension payments in line with the highest of consumer price inflation, average earnings growth, or 2.5% – should be removed. The increase in annual pension payments should instead track average earnings, it said.

Free TV licences based on age should be phased out but could be offered based on household income instead. The age when older people can apply for a free bus pass and receive winter fuel payments should also rise to at least five years after a person becomes eligible for the state pension, said the report.

It added that this could be phased in to coincide with the state pension age rising to 67 from 2026.

Amid a shortage of affordable housing in Britain, which affects younger people the most, the Lords committee urged the government to build more homes and implement further changes in the rental sector to support tenants.

Concerns over generational divisions have increased in recent years, as the millennial generation of young adults born in the 1980s and 1990s are increasingly squeezed out of the housing market and find it harder to achieve the same standards of living as their parents’ generation.

Research from the Resolution Foundation thinktank has shown millennials are half as likely as baby boomers to own their own home by the age of 30 and four times more likely to rent in the private sector.

The measures in the Lords report are, however, likely to prove politically unpalatable, with the government only holding a wafer-thin majority and older people more likely to vote in elections.

Charities have said that scrapping the free TV licence for over-75s could push 50,000 older people into relative poverty. Getting rid of the pensions triple-lock could potentially push up to 700,000 pensioners into poverty by 2050, according to the Pensions Policy Institute.

However, partly as a result of the policy, pensioners’ incomes have continued to rise since the last recession, at the same time as the incomes of working-age households have been eroded by inflation, weak wage growth and benefit cuts.

Ministers have been urged to scrap the triple-lock before, including after an independent review by John Cridland, the Confederation of British Industry’s former director-general. Theresa May had considered watering down the policy but parked the idea after she lost the Tories’ majority in the 2017 snap election.

Nicholas True, the chairman of the Lords committee, said: “We are calling for some of the outdated benefits based purely on age to be removed. Policies such as the state pension triple-lock and free TV licences for over-75s were justified when pensioner households were at the bottom of the income scale but that is no longer the case.”