Magazine article Public Finance

In the Bleak Midwinter

Magazine article Public Finance

In the Bleak Midwinter

Article excerpt

On the face of tt, recent months have offered little in the way of festive cheer for older people, unless you count the one-off payment of £60 announced in the PreBudget Report Rising pensioner poverty, the high cost of gas and electricity, discrimination in health care and a crumbling social care system continue to blight the lives of many of the poorest and most vulnerable pensioners.

Yet the new year could bring renewed optimism, if ministers can turn their rhetoric about fairness into reality. And, with landmark legislation planned to tackle age discrimination and a green paper promised on care reform and funding, 2009 could turn out to be a good year for older people.

People on low fixed incomes spend more of their income on food and heating than others and have been hit hard by the rising cost of living. The steep rises in household bills earlier this year pushed one in ten of the poorest pensioners into the red. Research commissioned by Age Concern in partnership with the Institute for Fiscal Studies showed that the 'real' rate of inflation experienced by the oldest and poorest pensioners in August this year was 9% compared to 5.4% for other age groups. And, with around one in three pensioner households now in fuel poverty, it promises to be a bitter winter for many older people.

Only a few weeks ago the Office for National Statistics reported a 7% increase in the overall level of excess winter deaths, the majority of which were among older people. Failure to keep warm or eat properly in cold weather can put elderly people's health at risk, but more than half of the over-60s are cutting back on food and heating to cut costs.

Compounding the high cost of gas and electricity is an energy market in which poorer people are routinely charged more for their energy than wealthier households. A good deal of attention has been given to the higher prices paid by those using pre-payment meters. Evidence suggests that those paying by cheque or cash, which include many older people, are being charged £93 a year more than direct debit customers.

Recent statements from ministers that they will intervene to end unfair energy pricing are therefore welcome. But more radical action is needed to help pensioners and families who are struggling to pay thenbills. With the government being pursued through the courts for failing to meet its target to eradicate fuel poverty for vulnerable households by 2010, anew strategy is needed. This would be supported by a fair funding formula that recognises the estimated £9bn in windfall gains received by the energy industry from the European Union Emissions Trading Scheme.

The £60 payment announced in the Pre-Budget Report and the previously announced increases in the Winter Fuel Payment will go some way to easing the financial pressure on pensioners over the Christmas period. However, as food and energy bills are not affected, the oldest and poorest households will see little benefit from the cut in VAT designed to boost the economy.

The commitment to increase Pension Credit in line with inflation is welcome. But the extra benefit will not reach millions of pensioners who are missing out on the money they are entitled to. Five years on from its launch, almost a third of people entitled to Pension Credit are still not receiving it, with the 1.8 million pensioners who are failing to clami missing out on almost £1,500 a year each. The government must do more to help older people claim the money they are entitled to by moving to a system where benefits are paid automatically. …

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