They may have toiled for decades, but pensioners are still paying for the mistakes of latter governments. That certainly was the case this week following the Budget announcement, in which Chancellor George Osborne sought to raid £3 billion out of pensioners’ pockets. The “granny tax” has turned out to be just another farce to serve high-earners, cutting the 50p top rate for Britain’s wealthiest earners.

The government has put a spin on the whole ‘pensioners will be better off’ slant by stating a move towards a simplified single personal allowance. By freezing existing Age Related Allowances (ARAs) from 6 April 2013 until they align with personal allowances, and withdrawing ARAs from new pensioners; almost 360,000 people could lose £285 per year. A little contradictory to their ‘better off’ angle, especially as the richest 1% (earning more than £150,000), are having their taxes cut.

No doubt, young people are also receiving the short end of the straw. But while we may feel that work invades the majority of our lives now; improvements in technology, with easier-to-use computers now on most people’s desks, have meant that we are working on at a less frenetic pace than back in 1995.

Dr Burchell, a senior lecturer in the sociology department of Cambridge University, has with European colleagues been surveying workers every five years. The long-running study found that in 1990, British workers on the verge of retiring now spent 37% of their day working intensively. This increased substantially in 1995 to 49%, as the great majority of offices started to adopt computers on a widespread scale. However, in 2000 the figure fell to 45%. In the latest update, covering 2005, the figure has fallen again to 40%.

The Office for National statistics also dispels the myth that we are working longer hours now, as earlier this year; the average hours worked per week was 31.7, while in 1995 the number of hours worked by the average full-time worker was 38.5 hours a week. So is it really fair to ask those who spent the last four decades working intensively in technologically disadvantaged workplaces, to then foot the bill for the rich and privileged?

The Treasury acknowledged that some 4.5 million pensioners will lose out as a result of a decision to phase out ARAs, however to add insult to injury, businesses will also profit from the Budget as another 1% cut has been made in the rate of corporation tax.

The ‘Sheriff of Nottingham’ has also said that by 2014, the tax rate will drop further to 22%, despite pensioners earning a lower income of £10,500 to £24,000 unfairly losing allowances. Pensioners with an income of more than £30,000 (a mere 10%) will not be affected at all because they would not have received the extra allowance.

Saga director-general Ros Altman said on Twitter that pensioners have already been hit by high inflation and low interest rates giving them little return on their savings. Ms Altman wrote: “Older people already faced stealth taxes: Low interest rates, higher inflation, Quantitative Easing on annuities/income drawdown hit their income.

“The message of this Budget is – don’t bother to save for the future and if you’re too old to work anymore, you don’t count.”

The Institute of Fiscal Studies have also confirmed that people turning 65 next year will lose up to £323 with little forewarning. Labour’s shadow Chancellor Ed Balls reacted to the report stating: “It’s now even clearer that this was a Budget that asked millions to pay more so millionaires could pay less.”

And for the younger generations with longer lifespans, the Chancellor has introduced an automatic review to make sure retirement keeps with the pace of mortality. A 21 year old, emerging this summer from university will need to keep that steam up until they are 75, while a 2012 baby may see the prospect of retirement only 80 years later in 2092.

Next on the coalition government agenda: how to pilfer from the poor and public services. Oh wait, they already are.


About suswatibasu

Suswati Basu is a writer, journalist, producer and feminist activist residing in London. She has written for the Guardian, Huffington Post and the F-Word blogs, and has worked for various media outlets such as the BBC, Channel 4 and for ITV News/ITN. She currently works as a senior intelligence expert.

3 responses »

  1. redcommissar says:

    In the United States, many elderly people can not do much off their social security payments and what ever they had managed to get from pensions, and more recently 401ks and IRAs. It’s not uncommon unfortunately to see people even into their 70s and 80s working odd jobs to try and get some extra cash, with the burdens increasing on them from governments trying to solve deficit problems by slashing programs they rely on.

    Lot of retirement costs were essentially bumped off by the government and businesses by encouraging those from the ‘younger’ generations to use IRAs and 401ks instead of social security and pensions. The reasoning was that they would get better returns, since these were tied to the economy. Though of course those who happened to have hit retirement about 2008 pretty much saw a significant chunk of savings wiped out.

    Beyond the exploitative hiring, there’s also been a disturbing trend in people using the equity in their houses in reverse mortgages to make money they need, but end up having a bank or some other entity owning their house again and having a mortgage once more.

    Beyond some mongering about who’ll hit social security and Medicare the hardest, American political parties seem to ignore old age voters, even though they are typically a considerable chunk of people that show up to vote anyways. Interestingly they by and large vote for politicians who’ll make their lot even worse, at least they do in my particular state.

    • suswatibasu says:

      I can imagine the United States being even more hard-nosed about the elderly and their pensions, especially when the healthcare system does not even adequately help the public. Yes, I thought the old age voters made up a large majority of the GOP voters? Is there a formal retirement age in the US? At the moment, the UK’s retirement age is between 65 and 70, and the government are attempting to remove it altogether.

      • redcommissar says:

        There’s no federally mandated retirement age, but the age at which you become eligible for social security is 67. You can receive ‘reduced’ benefits at 62 or so if you were enticed by your organization to take a so-called ‘early retirement’.

        It’s depressing really to go into some workplaces and see elderly working full-time positions, and it’s difficult as it is to breakout of the minimum wage, and that’s magnified for an elderly worker.

        As to whether or not they vote Republican, it varies from place to place. Typically the elderly are more affected by the Republican Party’s appeals to patriotism and decrying the ‘social decay’ of the country. For the recent Republican primaries, one can see a strong presence of older voters, with sometimes those aged over 55 making up 40-60% of the total who voted.

        They’re very careful with rhetoric though- medicare (which many elderly rely on for healthcare costs) and social security can not be directly referenced as to be cut. George W. Bush’s attempts to push for an essential privatization of the social security program was interestingly initially greeted with support by elder groups like the AARP, but they later reacted strongly against it and the proposal was quietly dropped.

        More recently there was a drive by a congressman, Paul Ryan of Wisconsin, to try an approach of privatizing medicare into a voucher-like system which was criticized for shifting increasing healthcare costs onto the elderly, and that too ended. He has returned recently with a more ‘bipartisan’ friendly approach, and made a proposal that will have elderly ‘shop’ from an insurance exchange (similar to the one in the current government healthcare ‘reform’) of various choices along with the government plan. Some of these plans were included in a recent budget that has slashed spending in several social programs.

        Basically lots of attempts at trying to sink social security and medicare, and people accept it because of their growing percentage of the national budget (entitlement programs).

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