24.02.11

Think Tank Calls for Older People to Share Cuts Burden

A report from the Institute of Economic Affairs (IEA) think tank looks at the financial savings that could be made if non-means-tested benefits for older people were cut and the state pension system were reformed.  It calculates that £16 billion could be saved per year by 2015/2016 if older people shared the public spending cuts burden.

In its Sharing the burden – How the older generation should suffer its share of the cuts report, the IEA, says that older people enjoy a privileged position at present.  The non-means-tested benefits they receive have not been removed or reduced and the basic state pension is planned to increase above inflation. They also receive more favourable treatment in the tax system, with higher personal allowances than younger people and even a marriage allowance if one partner is over 75.

The IEA maintains that older people have received special treatment by the Government in its spending review – as they have been left more or less exempt from spending cuts. Whilst at the same time younger people have felt the cuts through changes such as in tuition fees and child benefit. 

The report proposes that by abolishing a number of non-means-tested benefits , including free bus travel, free TV licences for older pensioners and the winter fuel allowance - and by reforming the state pension system, including raising state pension age to 66 by 2015, the Government could save an additional £16 billion per annum by 2015/2016. 

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