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Sunday, 28 April 2013

Pensioners to be the new hate figure

I've commented before on our government's campaign to demonise benefit claimants. Up to now, the targets have been working age "scroungers" - pensioners have been off the radar and protected from cuts. (although some will argue that the rising pension age represents a cut)

Now, Iain Duncan Smith is suggesting that better off pensioners hand back their benefits such as the winter fuel payment (which isn't means-tested). The reason why these benefits are not means tested is simple - it  actually costs more to means test these small sums than just to dish them out to all. My guess is that if pensioners did start repaying benefits, the administration costs would result in a net loss.

Actually, pensioners have been helping the government on this issue for a long time anyway. What they've done is simply failed to collect/apply/etc for benefits. According to AgeUK, this amounts to £5.5 billion/year.

Pensioners are a tempting target. Although a lot of them have low incomes, they often have capital in the form of houses. Meanwhile, young people are often unemployed, in debt and have little chance of acquiring property.

There's a lot of pensioners and their numbers are growing. Any politician seen to attack them may suffer at the ballot box. The ballot-box hit isn't just from the pensioners themselves - it's from their children. Not only might children want to protect their aged parents - they'll want to protect their eventual inheritance. That inheritance might be the only chance to buy a house - but wait, the attractions of owning a house may be less if it comes under attack later in life.

A canny political move might be to encourage inter-generational conflict, EG: "It cannot be right that Granny Perkins lives alone in a three bedroom house while hard-working Kirsty is crammed into a one-bedroom flat with her two children". Perhaps Granny Perkins should have her state pension reduced for under-occupancy in order to encourage her to swap with Kirsty? I think that particular wheeze won't fly simply because it would be another "bedroom tax" and that policy is doomed medium-term as its unworkability becomes more evident. However, other policies that attempt to wrest money from older people can be expected. They will probably take the form of attacks on capital leveraged by attacks on income.

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