Pensioners need to feel the austerity pinch too

You've probably heard older people bemoaning how 'everything was better in the old days' but for retirees it seems that everything is also better now, especially when it comes to their financial situation.

Most of us are feeling the pinch from Osborne & Co's austerity measures. You may be someone on a low income who has seen benefits slashed or been subject to the particularly nasty bedroom tax, or a signed up member of the 'squeezed middle', who has been tipped into the higher rate income tax bracket thanks to government tinkering; you may have even lost your full entitlement to child benefit.

But one group of people who have not suffered are retirees, who have been fiercely protected from austerity measures by a ring-fencing of their benefits.

Chancellor George Osborne has saved £2.5 billion with his measures but the plan to cut the welfare and pensions bill by £19 billion has been thrown off course by the decision to 'triple lock' the state pension, which means it is guaranteed to rise at the highest of inflation, earnings, or 2.5%.

Coupled with people living longer and it is no surprise there has been a £5 billion increase in spending on the state pension since January 2010.

While working age benefits have been cut by 6%, the cost of pensions has jumped 11%. Figures by the IFS show total spending on pensioners was over £15 billion more than total spending on the rest of the population in 2013/14.

Article continues below

No slowing

The cost of older people isn't going to slow down either; we are all living longer. There are 10 million people aged 65 and over in the UK and in 20 years time that figure will increase by 5.5 million.

It's not realistic to carry on providing benefits that are as generous for as long, it is too much of a burden on those of working age. Older people annoyed about state pension age rises argue they have paid national insurance – which is widely believed to be your contribution to your state pension – and deserve to take their pension at 65. In reality NI is used to pay for existing pensioners, there is no 'pot of money' waiting for you in retirement built up of NI contributions.

Of course we should make sure older people are not living in poverty, but equally they need to do their bit in these times of austerity and the 'make do and mend' generation will have to employ that sentiment once again.

Read more:

Years of austerity to continue

61% fear impact of austerity cuts

Families to bear austerity burden