Friday, 21 March 2014


News coverage of the Budget rightly identified the political significance of Osborne’s give-away to affluent pensioners - it is a straightforward political bribe to potential UKIP voters. But there was no coverage of the ongoing cuts facing the poorest pensioners - the Tories are being allowed to get clean away with this.

In fact, far from protecting the elderly, the Coalition are actively dismantling provision for the pensioners on the lowest incomes, while protecting only the relatively affluent. They have exempted pensioners from the most severe of the benefit cuts affecting working age people - all pensioners are exempt from the bedroom tax for instance and have not been affected by the abolition of Council Tax Benefit - but they are systematically attacking incomes and services for the elderly poor.

  • For 3 million low income pensioners it is not the rate of State Retirement Pension that matters but the rate of Pension Credit. This is the guaranteed level of income for all pensioners, introduced by Labour - currently £145.40 a week for a single person.  Pension Credit succeeded in alleviating the most acute pensioner poverty when it was introduced. The Tories are cutting it. They froze Savings Credit - which provides a small addition to Pension Credit for those with other income - in 2012, saving £330 million. More importantly the much vaunted 'triple lock' on pensions merely guarantees the same cash increase to Pension Credit rates as is applied to State Retirement Pension. But Pension Credit is higher than State Retirement Pension so applying the same cash increase results in a lower percentage increase. So in April 2013 State Retirement Pension for a single person increased by £2.70pw or 2.5%. Pension Credit also increased by £2.70 but this was an increase of just 1.9% - well below inflation. The Tories are systematically eroding the income of the poorest pensioners

  • Pensioners, while exempt from many of the Tories welfare cuts, are not exempt from cuts to Housing Benefit in the private rented sector. Again, this affects the poorest pensioners who are more likely to be in private rented accommodation. Low income pensioners who are in work, or who care for children or grandchildren, are also affected by cuts to Tax Credits and Child Benefit. All this is difficult to quantify but low income pensioners are bearing their share of the billions being cut from welfare overall.

  • Poorer pensioners are also likely to be in worse health and therefore more severely affected by the financial starvation diet and chaotic privatisation being inflicted on the NHS. They are especially likely to be users of local authority funded care services, which are at the forefront of every council’s cuts (because they are every council's biggest expense). Increasingly stringent charging regimes mean that most affluent pensioners do not use local authority funded care services - which are therefore becoming a ghetto for the poor and disabled. Service standards are falling because of continual pressures for savings. and more and more elderly people cannot get a service at all. Charges meanwhile take away the whole of any spare income care service users have

  • meanwhile genuinely helpful measures like free bus passes - which could be extended at little extra cost - are of no value when the bus service is withdrawn or cut, as is happening in many areas

  • A further cut from October 2014 will mean that low income pensioners, who have a younger partner, below pensionable for women, will no longer be able to claim Pension Credit at all - the younger partner is expected to claim JSA instead to top up the older partner’s pension

  • And the steady increase in pensionable age - 66 for both men and women by 2021 - means a longer wait, often in poor health, for what help there is. The years leading up to state pensionable are now often the hardest and most poverty stricken in working class lives, as earning potential is reduced with few having occupational pensions to make up the difference - especially women.

  • Then there's the 'welfare cap' announced by Osborne - an annual cap on nearly all welfare expenditure. State Retirement Pension - by far the biggest element in total welfare expenditure - is NOT included in the cap. Pension Credit, and other pensioner benefits mainly claimed by lower income pensioners - like Attendance Allowance - ARE included. So benefits for the poorer pensioners are going to go on being squeezed, while Retirement Pension, which mainly benefits middle and high income pensioners, is protected.

  • Finally real pensioner inflation, especially for the poorest pensioners is likely to be higher than the official CPI because pensioners spend a greater portion of their income on basic items like food, fuel and rent which have increased faster than overall inflation.

The truth is that Cameron is providing some assistance to middle and higher income pensioners, through the Budget giveaways, the triple lock and through increases in the basic income tax allowance, but is systematically neglecting millions of the poorest pensioners by these various statistical sleights of hand. But then poor pensioners don't vote Conservative.

And Labour? Labour have said not a word in defence of Pension Credit and poor pensioners; instead they are planning to slash universal pensioners benefits like fuel allowances and bus passes.