Post by Eileen on Apr 23, 2009 9:42:24 GMT
Call for Budget to tackle impact of the economic crisis on older population
A new report from Britain’s biggest pensioner organisation, the National Pensioners Convention (NPC), is calling on the Chancellor to use his Budget on April 22 to introduce a series of measures to help hard-pressed pensioners who are struggling as a result of the recession.
The report entitled The Retired Recession - How the economic crisis affects older people outlines four key areas of concern amongst older people and proposes a number of measures that would both boost pensioner incomes and stimulate local economies. The report focuses on:
Loss of income for pensioner savers
The drop in the interest rate over the last 12 months has severely affected around 5m older people who have modest savings of £10,000 or more. Over this period they could have lost between £10 and £20 a week (up to as much as £1000 a year).
Recent research suggests that because pensioner poverty is so finely balanced (with a large number of people just above and just below the poverty threshold) a small difference in income can have a dramatic effect on people.
NPC Recommendation: Introduce combined tax allowances enabling pensioner couples to be assessed on a joint income rather than individually. This would mean that in most cases, older people would be exempted from paying any income tax.
· Rising costs of living
Older people face annual inflation rates around ten times higher than the rest of the population, according to a recent report by the Institute of Fiscal Studies. Pensioners spend a larger proportion of their income on those items whose prices are rising fastest. Therefore, rising costs of food and fuel, combined with record lows in savings returns and underperforming pensions, mean that pensioners will suffer a disproportionate increase in the cost of living.
The scale of pensioner poverty is rising - 822 pensioners fell into poverty every day last year. 2.5m older people now live below the official poverty line. Means-tested benefits fail to reach almost 2m of the poorest pensioners.
NPC Recommendation: Increase the state pension to £165 a week (official poverty level) as a way of tackling pensioner poverty and boosting local economies.
· Rising fuel poverty
One in three pensioners is estimated to be spending more than 10% of their income on energy bills, placing them in fuel poverty. Average annual energy bills now exceed £1,000 and this absorbs 16% of the income of a single pensioner in receipt of the pension credit minimum guarantee. The Winter Fuel Allowance originally covered one third of the average bill, now it covers a fifth. Every year over 20,000 pensioners die of cold related illnesses.
NPC Recommendation: Increase the Winter Fuel Allowance to £500 for every pensioner household.
· Cuts in essential services
Over the next few years the case will be made for public spending cuts and/or rises in taxation in order to pay for the bail out of the banking industry. This will mean benefits and services to older people may be under threat. One of the key areas will be social care, which is already in crisis and chronically under funded.
NPC Recommendation: The forthcoming Green Paper on social care should include additional public spending of at least £2bn to meet growing demand and improvements in the quality and availability of care services.
Dot Gibson, NPC general secretary said: “Very few recognise the terrible effect that the recession is having on those in retirement. Pensioners urgently need a boost to their income to help them through the current economic crisis. Millions have lost money from their savings, others are struggling with the rising cost of living and some have seen cuts in the care they receive. This generation has tried to put money aside for a rainy day – but no-one warned them of a monsoon. Increasing the state pension, tackling fuel poverty, improving care services and helping older savers would not only put money into pensioners’ pockets in the short-term, but they would also ensure that local economies benefited, because pensioners would go out and spend their extra money. Budgets can’t just be for bankers – they must help older people as well.”
A new report from Britain’s biggest pensioner organisation, the National Pensioners Convention (NPC), is calling on the Chancellor to use his Budget on April 22 to introduce a series of measures to help hard-pressed pensioners who are struggling as a result of the recession.
The report entitled The Retired Recession - How the economic crisis affects older people outlines four key areas of concern amongst older people and proposes a number of measures that would both boost pensioner incomes and stimulate local economies. The report focuses on:
Loss of income for pensioner savers
The drop in the interest rate over the last 12 months has severely affected around 5m older people who have modest savings of £10,000 or more. Over this period they could have lost between £10 and £20 a week (up to as much as £1000 a year).
Recent research suggests that because pensioner poverty is so finely balanced (with a large number of people just above and just below the poverty threshold) a small difference in income can have a dramatic effect on people.
NPC Recommendation: Introduce combined tax allowances enabling pensioner couples to be assessed on a joint income rather than individually. This would mean that in most cases, older people would be exempted from paying any income tax.
· Rising costs of living
Older people face annual inflation rates around ten times higher than the rest of the population, according to a recent report by the Institute of Fiscal Studies. Pensioners spend a larger proportion of their income on those items whose prices are rising fastest. Therefore, rising costs of food and fuel, combined with record lows in savings returns and underperforming pensions, mean that pensioners will suffer a disproportionate increase in the cost of living.
The scale of pensioner poverty is rising - 822 pensioners fell into poverty every day last year. 2.5m older people now live below the official poverty line. Means-tested benefits fail to reach almost 2m of the poorest pensioners.
NPC Recommendation: Increase the state pension to £165 a week (official poverty level) as a way of tackling pensioner poverty and boosting local economies.
· Rising fuel poverty
One in three pensioners is estimated to be spending more than 10% of their income on energy bills, placing them in fuel poverty. Average annual energy bills now exceed £1,000 and this absorbs 16% of the income of a single pensioner in receipt of the pension credit minimum guarantee. The Winter Fuel Allowance originally covered one third of the average bill, now it covers a fifth. Every year over 20,000 pensioners die of cold related illnesses.
NPC Recommendation: Increase the Winter Fuel Allowance to £500 for every pensioner household.
· Cuts in essential services
Over the next few years the case will be made for public spending cuts and/or rises in taxation in order to pay for the bail out of the banking industry. This will mean benefits and services to older people may be under threat. One of the key areas will be social care, which is already in crisis and chronically under funded.
NPC Recommendation: The forthcoming Green Paper on social care should include additional public spending of at least £2bn to meet growing demand and improvements in the quality and availability of care services.
Dot Gibson, NPC general secretary said: “Very few recognise the terrible effect that the recession is having on those in retirement. Pensioners urgently need a boost to their income to help them through the current economic crisis. Millions have lost money from their savings, others are struggling with the rising cost of living and some have seen cuts in the care they receive. This generation has tried to put money aside for a rainy day – but no-one warned them of a monsoon. Increasing the state pension, tackling fuel poverty, improving care services and helping older savers would not only put money into pensioners’ pockets in the short-term, but they would also ensure that local economies benefited, because pensioners would go out and spend their extra money. Budgets can’t just be for bankers – they must help older people as well.”