Avocado toast. Netflix subscriptions. Starbucks. We young people are all too familiar with hearing these criticisms from the boomers whenever we moan about the fact that the simple act of buying a house has become almost impossible for our generation. Oh, how the tables have turned as we are now expected to be outraged that millions of wealthy pensioners will no longer receive free money from the state.
When Gordon Brown introduced the Winter Fuel Payment (WFP) in 1997, pensioners were significantly poorer than people of working age, pensions were linked to inflation and there was no triple lock; so the annual tax-free payment of £100–£300 was viewed as a helpful and necessary form of government support.
However, over the past 25 years, pensioners have become steadily healthier and wealthier. According to ONS data, one in four pensioners live in a millionaire household. Just under half of pensioners are now in the top half of the population as a whole by income.
The “baby boomer” generation have been hailed as the “the richest generation in history”. Yet the British welfare state still treats old age as a proxy for need, giving £2bn a year to pensioners through the WFP, regardless of how wealthy they are.
Or so they did, until the new Labour Government came into power this July and announced they would be restricting the WFP only to those on Pension Credit or other benefits, reducing the number of claimants by over 10 million.
They hope will save taxpayers £1.5bn a year.
The move to means-testing the WFP was justified by the Treasury, arguing that “this will better target support for heating costs at those who need it”. Speaking on the cut, Chancellor Rachel Reeves said: “The decision about winter fuel, it isn’t a position that we wanted to be in.
No one wants to be in the position, but you’ve got to make those sorts of choices.” But did they really have to make this choice?
Charity Age UK, who have been critical of the cut, argue that this decision will be detrimental to the 2.5 million pensioners on low incomes which aren’t quite low enough to qualify for pension credit.
Commenting on this point, Money Saving Expert Martin Lewis said: “While there's an argument for ending its universality due to tight national finances, it's being squeezed to too narrow a group— just those on benefits and Pension Credit.
Yet again, those just above the thresholds will be hardest hit.”
Perhaps the biggest critique of all is that the cut to WFP won’t even save the Government as much money as they anticipated. Following the announcement, applications for pension credit have increased by 152%. On current trends, data suggests there could be an additional 158,000 claims, costing £246 million.
But Labour aren’t necessarily viewing this increased uptake as a bad thing, with a government spokesperson saying: “We want people to get the benefits they are entitled to, which is why the government is working hard to drive up pension credit uptake. We are committed to supporting pensioners—with millions set to see their state pension rise by £1,700 this parliament through our commitment to the triple lock.”
According to ONS data, the proportion of over-65s with a total wealth above £1 million has grown from 9% to 27% since 2010. Yet, it’s not just about millionaires.
Many other pensioners are asset wealthy due to property they own that has benefited from booming housing markets.
Speaking of this, Liz Emerson, CEO of the Intergenerational Foundation, a charity that campaigns for youth-friendly government policy, said: “When you combine housing wealth and pension wealth, older people have been doing far better than the younger generation over recent years... Should these pensioners be subsidised by younger taxpayers to stay in a valuable home? It seems to us to be intergenerationally unfair.”
This point was unintentionally yet hilariously highlighted in a recent Conservative advert where they interviewed pensioners who will be losing out on the WFP, yet eagle eyed viewers noticed expensive decor, top-name coffee machines, and a grand piano in the background of the houses of the poor old pensioners who are choosing between “eating and heating because of Labour”. The magnum opus of this controversial clip though came from one gentleman wearing a Rolex watch estimated to cost around £17,000 as he moaned about losing out on the £200 payment.
Perhaps the most frustrating part about this is the fact that there are over 4.3 million children currently living in poverty in the UK (which is double the amount compared to pensioner poverty), and yet when the two-child benefit cap was put in place by the Conservatives, no one seemed to bat an eyelid.
To highlight the hypocrisy even more, child benefits are already means-tested, meaning many struggling parents just above the threshold are excluded from support. If we’re content with means testing benefits for children, why shouldn’t we be content with means testing benefits for pensioners?
If the younger generation is expected to fend for itself, surely those with Rolexes and grand pianos can afford to lose a small slice of state-funded pie.
In a time of limited resources, maybe it’s time we reconsider what 'need' really means—because if we’re content to tighten the belts around children living in dingy flats where they share a bedroom with three siblings and are going to school unwashed and hungry, we shouldn’t be loosening them for boomers living in four-bedroom houses and wearing designer watches.