Spending cuts need to be extended to pensioners

Posted on February 24th, 2011 | Categories - News

The older generation should have to contend with spending cuts in the same way as other groups.

The younger generation has taken on most of the burden when it comes to the recent austerity measures implemented by the government.

Pensioners should share the burden of government spending cuts and should no longer receive special treatment, according to the Institute of Economic Affairs (IEA).

The IEA has calculated that almost £16 billion could be saved by scrapping pensioner benefits. The savings could be used to pay for lower taxes and benefit top-ups for low income families.

Philip Booth, editorial director at the IEA, said: “The Government has imposed many new burdens on the younger generation in how it has chosen to cut and where it has chosen to raise taxes. They have let older people remain largely insulated from much of the cuts. It’s time this changed”.

The Institute outlined that by 2015 about £700 million could be saved by scrapping free television licences, £1.3 billion by stopping free bus travel and £2.1 billion from abolishing the winter fuel allowance. It also highlighted that a further £5 billion could be saved by raising the state pension to 66 in 2015 instead of 2020 under the current government plans.

Mr Booth said the review “would lead to huge tax decreases – including tax decreases that would benefit the old, such as a large cut in VAT”.

Also under the IEA’s proposals is a top-up benefit that would make sure pensioners had enough cash to spend on bus passes and heating costs.

The IEA said: “This group has received special treatment by the Government – it has been left more or less exempt from spending cuts. At the same time younger people have felt the cuts through changes such as in tuition fees and child benefit”.