Sunday 25 February 2018

Old get richer in UK as young get poorer

Oliver Wright and Charlie Cooper in London

BRITAIN'S growing army of pensioners is getting a better deal from the state than at any time in the past 15 years, while the young bear the brunt of the recession.

Research published by the Institute for Fiscal Studies (IFS) reveals that the wealth of the elderly has grown faster than that of any other age group, while the amount they pay in tax has progressively fallen.

A separate study, also released yesterday, suggests that the young have lost out compared with older generations since the financial crisis of 2008.

The two pieces of research call into question David Cameron's pledge in a speech yesterday not to means-test benefits for the elderly, while suggesting removing some entitlements for the young unemployed.

Losing

The IFS research found more than 40pc of pensioners are now in the top half of the income distribution bracket, compared with 25pc 20 years ago.

Pensioners' incomes have risen by 29.4pc over the past 12 years, while non-pensioners' incomes have risen by 26pc. And changes to the tax and benefits system mean pensioners are paying less to the state than people of working age.

The most recent benefit cuts and tax rises, which will soon come into force, will reduce pensioners' incomes by £316 (€390) per year compared with £1,781 for households with children.

A pensioner with a gross income of £50,000 now loses only 20pc of that in direct taxes, while a working age person with the same income loses 29pc. Pensioners are eligible for benefits such as free TV licences, winter fuel allowances and free transport. The government has also restored the link between pensions and earnings, with a new guarantee that pensions will rise by whatever is highest: earnings; inflation; or 2.5pc.

But Paul Johnson, director of the IFS think-tank and a co-author of the report, said it was clear that younger people had suffered the most during the recession. (©Independent News Service)

Irish Independent

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