Tuesday, 7 January 2014

Pensions debate should not be set in the context of inter-generational conflict

Why are pensioner’s issues increasingly getting framed in the public discourse in terms of inter-generational conflict.
There was a recent example of this happening when Prime Minister David Cameron announced that his government would be retaining the triple lock approach to pension rises beyond the next general election. The triple lock ensures that pensions will increase by the level of inflation, wage rises or 2.5% whichever is the greater.
The immediate media response was to contrast this approach with that of the freeze that has been imposed on benefit rises that go to younger people.
So there was a visible effort to set one generation against another. This dangerous argument has been being fostered in the media for some time now, namely that younger people are having a tough time because the elderly are getting all the benefits and have lived in a profligate way in the past.
It is an insidious development that follows the attempts to set worker against worker and low paid worker against benefit recipient – the idea of the deserving and undeserving poor, the striver and skiver. It is a very reductionist argument.
The National Pensioners Convention makes the point that pensioners should not be seen as some sort of drain on the country.
“Whilst the overall cost to the Exchequer (providing pensions, age-related welfare payments and health services) was found to be £136.2bn, the revenues from older people (financial or otherwise) added up to £175.8bn. The overall net contribution by older people to the economy was therefore almost £40bn a year,” said a spokesperson for the NPC.
In addition, between £3.7 and £5.5 billion of means-tested benefits that should rightfully go to older people in Britain went unclaimed in 2009-10. 
The reality is that pensions and benefits can be afforded for old and young alike. At present, the National Insurance Fund, which pays for the state pensions is actually £30 billion in surplus, so there is no shortage of funding.
The pot may need to be made bigger in the future but why not look to do increase income by collecting more tax from the richest in society as well as claiming the tax from the large corporate tax dodgers.
Let’s stop wasting so much money on conflicts in countries like Afghanistan and Iraq, as well as scrapping weapons like the Trident nuclear system. Then there would be a lot more funding available.
Let’s not fall for divide and rule arguments. Pensions that enable everyone when they reach retirement age to live above the poverty line are easily affordable as well as being for the common good of all – young and old alike.  

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