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Scrap pensioner perks and support young people instead, peers say

Peers have said pensioner benefits should be scrapped. Credit: PA

Free TV licences, bus passes and winter fuel payments for pensioners should be scrapped to address the imbalance between young and old people, peers have said.

Ministers have been told the balance needs to tip in the favour of young people so the bond between the generations is not put at risk.

The House of Lords Committee on Intergenerational Fairness said the pensions triple lock should also be cut, which guarantees the state pension rises by either inflation, wage growth or 2.5%, whichever is highest.

Peers have said younger people need more support in the housing and employment markets, and more needs to be done to prepare the country for future predicted 100-year lifespans.

The report urges ministers to abolish TV licences and replace them with means-tested licences. Credit: PA

Committee chairman Lord True said: "We are calling for some of the outdated benefits based purely on age to be removed.

"Policies such as the state pension triple lock and free TV licences for over-75s were justified when pensioner households were at the bottom of the income scale but that is no longer the case."

The report urges ministers to scrap free TV licences in favour of means-tested licences based on income.

Lord True has recommended investing in social and private housing so young people can stop being "short changed by the housing market", as well as bringing in new laws to protect people renting their homes.

The winter fuel allowance should also be scrapped, the report says. Credit: PA

The committee says in the report "a decade ago the agenda would have been dominated by pensioner poverty but due to the introduction of pension credit this changed so that poverty now 'wears a younger face'."

According to the report, pensioner households are now better off than many working age households.

Lord True says in the report: "We found that intergenerational bonds are still strong, and the evidence suggested both young and older people recognise the contribution the other makes and the challenges they face.

"However, there is a risk that those connections could be undermined if the Government does not get a grip on key issues such as access to housing, secure employment and fairness in tax and benefits."

But Anna Dixon, chief executive of the Centre for Ageing Better, said the argument should not be about "old versus young", but "creating a society where everyone regardless of income or background can enjoy every stage of life".

"Headline-grabbing proposals like abolishing free TV licences based on age risk distracting from the big structural changes needed across housing, work and communities," she said.

Caroline Abrahams, Charity Director at Age UK agrees younger people need more help, but this should not be at the expense of the older generation.

"We reject the notion that helping younger and older people is an ‘either/or’; in practice many at both ends of the age spectrum need our society’s support and an advanced twenty first century economy like the UK is well placed to provide it," she added.

What benefits do OAPs get?

  • Pension credit - tops up the state pension for those on a low income and comes in two parts. The guarantee credit tops up your weekly income to a guaranteed minimum level and the savings credit is extra money if you income is higher than the basic state pension.
  • National Insurance cut - once you reach state pension age, you no longer pay National Insurance, even if you are still working.
  • Housing benefit - is available if you pay rent, are on a low income and or have savings less than £16,000.
  • Winter fuel payment - is an annual tax-free payment to help with heating costs.
  • Cold weather payment - these are £25 payments for each seven-day period of very cold weather.
  • Free bus pass - in London, Wales, Scotland and Northern Ireland, you get a free bus pass when you reach 60, the rest of England, you get a free pass when you reach state pension age.
  • Senior railcard - is available to all travellers aged 60 or over and offers a third off rail travel.
  • Free prescriptions and eye tests - when you reach the age of 60, you can get free prescriptions and NHS eye tests.