WHILE David Cameron vowed to protect pensioners’ universal benefits until the next General Election, Chancellor George Osborne has already announced ex-pat pensioners will be ‘temperature-tested’ for the winter fuel allowance.

Personal tax allowances have also been frozen to bring pensioners in line with working people, and some fear the free bus pass could be next to hit the skids with further means testing in the pipeline.

But John Mackie, 74, chairman of Oxfordshire Pensioners’ Action Group (OPAG) says pensioners are being unfairly targeted.

“The total annual benefits bill is £159bn, but it’s a myth that older people account for a lot of that,” he explained.

“Of that £159bn, £72.7bn is the cost of state pension, which is not a benefit at all.

“The true benefit bill is £86.08bn, and of that, £47bn is general welfare benefits, £29.09bn is for tax credits to working families, leaving just £11.8bn spent on pensioners – £8bn through pension credits, £2.2bn on the heating allowance, £1bn, for bus passes and £590m for free TV licences.”

The annual winter fuel allowance ranges from £100 to £300 and is paid to everyone born before Jan 1952.

Mr Mackie said: “When the allowance first came out it was quite useful, but now it does not match up to the rising cost of fuel – Between Feb 04 and Jan 11 alone gas bills rose by 121 per cent and electricity bills by 79 per cent.

“The UK is known as the ‘Cold Man of Europe’ – 124,000 pensioners died last winter – 400 here in Oxfordshire – and withholding the fuel allowance will only endanger more.”

A free bus pass is available to everyone reaching state pension age and television licences (worth £145.40) are free to over 75s.

“These both prevent people from being isolated from the world outside,” argued Mr Mackie.

Restricting winter fuel payments and free TV licences to pensioners who qualify for the pension credit top-up would save around £1.4bn a year. But means-testing them could cost far more.

According to Age UK, in 2010-11 each new pension credit claim costs £351. Eleanor McGrath, pictured, campaign manager of the TaxPayers’ Alliance, believes universal benefits should be merged with the state pension.

She said: “Even those on modest incomes have paid high taxes throughout their working lives. Many quite rightly feel that when they reach a certain age they should get something in return for all that they’ve contributed into the taxman’s coffers. It’s no surprise then that the suggestion of axing these perks generates fierce opposition.

“However it’s ridiculous for the Government to take a heap of people’s money in tax only to return some of it back to them in handouts. This creates needless and expensive bureaucracy which only benefits politicians. It’s far better to leave money in peoples’ pockets in the first place and allow them to judge best how their cash is spent.

“It makes sense to merge these benefits with the state pension which, in turn should be simplified so that people know exactly how much they will get when they retire and can plan their finances properly.”

Mr Mackie says pensioners won’t take the cuts lying down. He said: “Older people are the greatest number of voluntary workers and the greatest spenders on our endangered high streets, but we are also 11 million strong and vote with our feet.

“And if these benefits are taken away, I can only predict a backlash at the next election.”

 

MANY ELDERLY ALREADY ON BREADLINE

PAUL Cann, chief executive of AGE UK Oxfordshire believes the answer lies not in removing pensioners’ benefits, but in giving them more.

He explained: “We have 1.6 million pensioners living below the poverty line – 14,000 here in Oxfordshire – at the same time we have around £5.5bn in pension credits not being claimed.

“Despite the efforts of the government and organisations, many people are living in poverty unaware they are entitled to help.

“We need more effort put into informing people of these benefits because that little extra money can mean the difference between people staying fit and healthy for longer. And with people working for longer they have less chance of falling into poverty and we all know that this has wider benefits to our society.

“To sum up, let’s get our priorities right.”

Bishop of Oxford, the Rev John Pritchard, said: ‘I’m very wary of the suggestion of removing universal benefits. It sounds reasonable but the reality behind the term ‘better off’ can hide many different situations. It may be better for those of us with sufficient income to donate our benefits, such as the winter fuel allowance, to good charities. To means test pensioners would be very difficult and bring pretty small returns.”

Jayne Woodley of Oxfordshire Community Foundation agreed: “Oxfordshire Community Foundation, through its Surviving Winter Appeal is able to identify residents struggling to make ends meet and redistribute funds donated by others, to quite literally help them survive. Over the last three years the appeal has raised more than £100,000.”

 

  • Pensioners have had a more favourable personal allowance (the amount you can earn before paying tax) since Winston Churchill introduced it in the 1920s.

But while the tax-free allowance for under 65s has gone up to £9,440 in 2013-14, meaning they can now earn more before paying tax, this has not been extended to many pensioners.

For 65-74-year-olds, the first £10,500 is tax free and for 75s and over, £10,600. These are being frozen until the rising under-65s allowance catches up with them in a few years time.

John Whiting works for the national charity Tax Help for Older People which runs surgeries in Abingdon and Banbury for older people who cannot afford to pay for professional advice.

He said: “Her Majesty’s Revenue and Customs (HMRC) is currently closing all its offices to the public, so all contact will eventually have to be by phone or internet.

“They are setting up some home visiting teams, but groups like ourselves and TaxAid expect to be very busy bridging the gap and many of our clients are very worried by their financial affairs.

“Pensioners are feeling more vulnerable since the freezing of the over-65 tax allowances and many we see are feeling financially stressed as many are on fixed incomes and are dependent on ever decreasing interest rates to meet their daily needs.”