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Think tank suggests stripping pensioners of benefits

coin jarA top think-tank has controversially claimed that benefits, such as free bus passes and winter fuel allowances for pensioners, should be banned because the economy derives little benefit from their inclusion.

The Social Market Foundation (SMF) has said that the £1 billion it costs to provide free travel and £2 billion for help with the heating could easily be stripped out of spending to give the country a much needed boost, without putting further pressure on the economy.

The proposals have sparked outrage amongst many charities which claim that pensioners rely on being able to get around to prevent becoming isolated and that the fuel allowance can quite literally be a lifeline.

The SMF unveiled the comments in a report published this week and suggested that the cuts to free benefits for older Brits would make no difference to the economy but would provide much-needed cash for the government. The think-tank also proposed that the tax-free element of ISAs are capped and child benefit is means-tested.

Organisations representing pensioners have responded angrily to the report and said that the SMF has failed to take everything into account.

Saga, the over-50s group, said that nearly nine out of ten of pensioners they polled said their free bus pass was essential to them. The director general of Saga, Ros Altman, described the suggestions as ‘short-sighted’ and said that removing free travel could mean that many pensioners were unable to leave their house, a move which would put extra pressure on services such as the NHS.

The director of policy at Independent Age, Simon Bottery, also condemned the suggestion that the winter fuel allowance be scrapped for many pensioners and said that implementing the proposal could ‘mean the difference between life and death.’

Mr Bottery said that around one in three pensioners does not claim Pension Credit and making the payment only available to those that do could mean excluding some of the poorest OAPs in Britain from financial help. He added that there were already campaigns which encouraged pensioners who were well off to voluntarily give up their winter payment, a plea which many acceded to.

Age UK weighed into the debate, siding with Saga and Independent Age and slamming the proposals for attempting to remove pensioners’ ‘means to play a more fulfilling role in society.’ The director general, Michelle Mitchell, said that many older people are forced to exist ‘on the fringes’ and that taking away their only route would simply make many more isolated. She added that many have no choice but to make decisions which ultimately affect their health, due to a lack of funds and described the winter fuel allowance as a ‘lifeline.’

Other experts have suggested that the report also does not take into account the contributions pensioners make by the money they are able to spend whilst they are out and about, some of which could be vital to local businesses.

But despite the criticisms from all quarters, the think-tank has maintained that the conclusions outlined in the report make good fiscal sense and said that ‘a new economy’ must be created in order to resurrect the fortunes of the UK. The director, Ian Mulheirn, also the author of the controversial publication, said that if the changes were adopted by ministers, the government would find that there would be ‘increased economic output’ and described the proposal as ‘growth friendly.’

But Ms Altman from Saga came up with an alternative suggestion of her own. She proposed for the government to make better use of money currently in pension funds, a move which would stimulate growth in the economy, without having to enforce painful cuts on some of the most vulnerable citizens in Britain – the pensioners.

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