It’s only right that everyone shares in the pain of austerity, which means older people should start taking more of a financial hit.
This is the line being taken by a growing number of pundits and think tanks and, being couched in the language of fairness, has a certain superficial attraction until you start to look more closely at the facts.
Yes, pensioners’ incomes have risen faster than all other age groups in the last 30 years, but they are also still more likely to be found in the poorer half of the population. In Scotland, 15 per cent of pensioners – 140,000 individuals – live in relative income poverty.
So should we introduce means testing, meaning wealthy pensioners won’t receive state hand-outs? No. Means-tested benefits are complicated and often fail to reach many who need them, for example around a third of older people who are entitled to pension credit don’t get it. Any increase in means testing risks penalising those vulnerable people who might slip through the net, or who are too proud to claim.
We often hear of the absurdity of giving Winter Fuel Payments to millionaires, but isn’t the odd anomaly worth accepting, given the value of this benefit for keeping older people with low state pensions warm in winter? Research by the Institute of Fiscal Studies (IFS) shows households receiving Winter Fuel Payments are almost 14 times as likely to spend the money on fuel than would have been the case had their incomes been increased in other ways.
You could start to tax Winter Fuel Payments, but this would greatly increase the cost and complexity of the tax system and may require more older people to fill in tax returns. Would this really be worthwhile, given less than half of pensioners currently pay income tax, and fewer than 4 per cent pay the higher or additional rate of tax? Between February 2004 and January 2011, gas bills rose by 121 per cent and electricity bills by 79 per cent, while the cost of Winter Fuel Payments and the amount people receive has been falling. Further tampering with Winter Fuel Payment risks making the “heating or eating” dilemma many older people face each winter even more acute.
Universal benefits are not just about ensuring older citizens remain above the minimum income level acceptable in a civilised society; they are also an investment by society that can pay multiple dividends. Take the National Concessionary Travel (NCT) scheme – the free bus pass for older people. A review by the Scottish Government in 2009 found 85 per cent of holders enjoyed enhanced their access to services, 54 per cent had used their pass to access health services, and the scheme had helped them many older people to develop a more active lifestyle, including walking more often.
With home-based Free Personal and Nursing Care costing an average of £5,750 per annum, compared to residential care costs of £25,000, it is clear that investment to keep older people healthy and happy in their own homes and communities for as long as possible will represent a huge saving to the public purse in the long run.
We would like to see the NCT scheme extended; for older people who can’t access mainstream bus services, a free bus pass is of little use. This means many of the people the scheme was intended to help the most – including those who are frail, disabled, or living in remote areas – are experiencing, or at risk of, social isolation, and the spiral of declining mental and physical health which very often accompanies it. By allowing the bus pass to be used on community transport, the not-for-profit services that step in to meet needs that commercial transport services can’t or won’t cater for, we can ensure cost does not become a barrier to older people’s inclusion in the life of the community.
Since we launched our Still Waiting campaign for a better bus pass scheme in February, we’ve had explicit backing from 36 MSPs across all the main parties.
Now we would like to see Scottish ministers and opposition parties looking jointly at how to sustain and extend the NCT scheme. While in the long run, the estimated cost of around £11 million per year will be recouped through health and social care savings, we believe that the public would accept a change in bus pass eligibility age for future users from 60 to State Pension Age if required to fund it in the short term.
This solution would better target the benefit to those who need it most, while avoiding costly means testing that puts off many low income older people.
• Doug Anthoney is communication and campaign officer Age Scotland