It is commonly believed that the British government, a body elected by the people, mostly by its pensioners, always has their interests at heart. However, this perception is not entirely accurate.
It is often argued that a Conservative Party that relies on the support of seniors will prioritize their needs over those of younger generations and the economy as a whole. However, this view overlooks a significant fact. Indeed, older people have been hit hard by our stagnant economy, arguably harder than other age groups.
The Economic Squeeze on UK Pensioners
Pensioners are confronted with frozen thresholds, stealth taxes and other financial pressures. Property prices have skyrocketed, putting homeownership out of reach for many, and they are disproportionately affected by our inflexible pension system.
Additionally, the limited pension structure fails to adequately cover their living expenses. Although grant programs aim to ensure their comfort, seniors still struggle.
The financial struggles of our senior citizens surpass those of any other demographic.
Comparative Analysis of the Financial Challenges Facing Pensioners
According to an analysis released this week by the Resolution Foundation, even after accounting for rising costs, the average state pension recipient would only benefit by £190 annually from this year's 8.5 percent increase.
Furthermore, the Chancellor's six-year income tax threshold freeze would virtually eliminate this additional income, leaving pensioners with just an additional £20 per year after all factors are considered. In contrast, the Foundation found that the National Insurance (NI) cuts, from which pensioners do not benefit because they do not pay it, will increase the annual income of a parent earning £60,000 by £900.
Simultaneously, parents' earnings will increase by £1,300 annually if the child benefit repayment threshold is raised to £60,000. When considering all these factors together, it is evident that the Chancellor has prioritized the needs of individuals in their thirties over those in their seventies, even though millennials are unlikely to be appreciative of this prioritization.
Pensioners will also be disproportionately impacted by a reduction in dividend allowances compared to other demographic groups, given that many retirees rely on share portfolios for income.
This, not to mention the fact that the Chancellor's decision to cap the reduced rate of capital gains tax for entrepreneurs at £1 million, means that anyone selling a business they have spent a lifetime building will now have to pay a larger proportion of their profits to the Treasury.
Assistance to Younger Demographics
On the other hand, younger people have often been helped. The cuts to NI have benefited those who are starting their careers more than those who are close to retirement.
The Conservative party has proposed providing 'free' childcare for children over nine months, but even the Labour Party considers this unaffordable. Additionally, there have been significant increases in childcare allowances.
Policies such as Help to Buy were designed to help younger individuals become homeowners. To counteract the significant increase in inflation, the government has limited the repayment rate of student loans.