Retirees should lose free TV licences, state pension triple lock - and pay National Insurance, says Lords committee

25 April 2019
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A report from the House of Lords Committee on Intergenerational Fairness and Provision has made wide-ranging recommendations on benefits for the elderly, calling for much of the help for older generations to be curtailed.

It has called for the free TV Licence for over-75s to be phased out, and for the state pension triple lock to be ditched.

The report has also criticised Winter Fuel Payments and older person’s bus passes, calling for both benefits to be only made available five years after state pension age, and treated as taxable income.

The committee has also attacked the National Insurance system as unfair, and says individuals over the state pension age should pay.

It also makes recommendations for reform of council tax, stamp duty and inheritance tax. 

The committee has published these recommendations as part of a wide-ranging look at government rules and policies in order to "deliver a fairer society" and support younger generations better. 

The chair of the committee, Lord True, comments: "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."

National Insurance

The National Insurance system “functions poorly” as National Insurance Contributions (NICs) do not directly pay for the state pension, nor are they linked to any actual rules on the size of state pension payments, according to the committee.

The report says it is unfair that only those of working age pay the tax, and that those over state pension age should also contribute.

The committee says NICs should be merged into the income tax system, and that this would protect vulnerable older people from having to pay as contributions would be weighed against income.

David Sinclair, director of the International Longevity Centre – UK (ILC) comments: "The National Insurance exemption for older workers seems an anachronism. And savings could be better invested in any number of other initiatives – including in addressing the gross underfunding of public health and social care.

"Pensioner benefits are a matter of increasing political debate. While there is a strong case for universal pensioner benefits, it is also perfectly reasonable that these benefits should be taxed, so that those who can afford to pay do.”

State pension triple lock

The committee has called for the state pension triple lock to be abolished and instead increased alongside average workers' pay.

The report states: “The triple lock for the State Pension should be removed. The State Pension should be uprated in line with average earnings to ensure parity with working people.

“However, there should be protection against any unusually high periods of inflation in the future.”

Steven Cameron, pensions director at Aegon comments: “As the age profile and distribution of wealth of our population continues to change, it's critical that all government policies are considered through a lens of intergenerational fairness.

“The state pension triple lock has served its purpose of boosting the level of state pensions faster than average earnings but continuing it indefinitely is not financially sustainable."

Free TV Licences

The free TV Licence for over-75s has also been criticised. The report calls for the free TV licence to be phased out and those who can afford it should pay. It recommends that the government subsidise the poorest households instead.

The BBC is currently undergoing a consultation on whether or not to maintain the benefit as the cost is set to be passed to the corporation from the government in June 2020.

Bus passes and Winter Fuel Payments

The report also mentions the use of free bus passes for older people.

In London, Wales, Scotland and Northern Ireland the free bus pass begins at age 60 but for the rest of England it applies from the age of 65 and will increase in line with state pension age.

While the committee received criticism that the bus pass is accessible to some people who are still of working age, it conceded that there was an environmental case to be made to sustain it as the free bus pass encourages older people to use public transport instead of motor vehicles.

Winter Fuel Payments also come under the microscope.

The report says that the payments are “not well targeted.” It argues that single parents of working age are much more likely than single people or couples over the age of 60 to be in ‘fuel poverty’ and it therefore unfair that these households receive a subsidy to pay energy bills.

In both the case of Winter Fuel Payments and the free buss pass the committee recommends that people should not be given access to the benefit more than five years after reaching state pension age.

However, it recommends that transitional arrangements be put in place to protect those already in receipt of the benefit, who might lose out from rule changes.

It also says the government should look at treating these benefits as taxable income for those above the personal allowance threshold (currently £12,500 per year).

Mr Cameron adds: “With the Baby Boomer generation now above age 55 and increasingly in retirement, it's right to consider if blanket benefits for older generations remain appropriate or if the cost of funding these is falling disproportionately on younger workers.

“The average income of a pensioner couple is now £454 a week which means that incomes are now around 70% of non-retired households. This represents a huge change over recent decades and the stereotype of retirement as a time of constant thrift is largely outdated.

"Pensioner incomes have steadily risen as a result of factors like the provision of defined benefit pensions, increases in the state pension and strong performance of property prices and investments.

“However, while pensioners are on average better off this hides big discrepancies and across the country there are still many older people who struggle with fixed costs like heating bills. Some universal benefits like a free TV licence for wealthy pensioners do look hard to justify but the government should proceed with caution when it comes to reform of areas like the state pension.

"Some of the factors that have boosted pensioner incomes in recent years like defined benefit pension provision will not last forever as employers increasingly switch to less generous alternatives and any change could have significant consequences in the years to come.”

Inheritance, council and property taxes

The committee also makes recommendations for changes to council tax, inheritance tax and other property taxes such as stamp duty.

The report accuses council tax of being an "incoherent combination of a property tax and a service charge." It recommends council tax more closely reflect property values than it currently does, plus a system that allows those with high property values but low incomes to delay payment until the sale of a property. 

It also says second homes should be subject to pay a full rate of local tax.

Stamp duty has "seriously distorted" the housing market according to the committee. It calls on the government to review the system and its effect on housing market liquidity, and consider how it can be reformed to improve housing choices and availability for young families. 

Finally, the report accuses inheritance tax of being "capricious" and unfit for purpose. It recommends reviewing whether and how assets should be taxed on death or transfer to ensure greate intergenerational fairness.

Comments

In reply to by anonymous_stub (not verified)

what a cheek this coming from the lords on £300 per day plus expenses it's about time we ended there perks.that would save the country some money.

In reply to by anonymous_stub (not verified)

I think it's absolutely disgusting that they want to scrap all these entitlements to pensioners they have worked all their life for these entitlements and should keep them I have worked all my life ftom the age of 16 snd am now nearly 59 and when I retire I think I have earned the right to these entitlements the committee just consists of rich people who wont even need these entitlements as they have enough money of their own shame on yous who have never known hardship get the Tories out as soon as and get Britain back to be a place to be proud of

In reply to by anonymous_stub (not verified)

I think the lords should take a long look at them selfs. They should think about the money they are paid .Every day they go to the lords sign in they are paid 360 pounds alot of money if you go for asleep even once a week and remember most of them where MPs so would have made a forgin in Westminster. But some people only have there pension and if you take all that away ot have much of a life they would ( heat or eat ) after working all there life .

In reply to by anonymous_stub (not verified)

I've worked since I was 16, I am now 61. I have never received any benefits. I have paid for my own home via a mortgage and paid interest of 15% over in the 80s and 90s. I have made significant sacrifice throughout my life to make sure I paid into a pension and to protect myself in old age and make sure I didn't become a burden on the state. I have always paid NI and tax, and my plans for retirement have to include a fair state pension, and will rely heavily on not having to pay NI and having a bus pass as my age makes me less agile and more reliant on public transport to get around. I work in the NHS and have for many years so am already more than contributing to public health.No-one in the Lords or government know what it's like to have to work long hours on low wages to simply make end meets and live hand to mouth to make sure they have a roof over their head. I was brought up to respect everyone, including the elderly. I do not agree young have any respect for anyone other than themselves, and certainly not those who have worked and contributed to society for 50 years or more. They are a generation who expect everything on a plate, and now. They don't want to work for it.So instead of seeing pensioners as easy pickings, target those who should be making a financial and moral contribution to society as they start their lives like we had to. And, of course, those who refuse to pay their taxes or use tax avoidance schemes to minimise what they pay whilst the rest of us on PAYE play by the rules and are proud to do so for the benefit of all.

In reply to by anonymous_stub (not verified)

What can you expect from people who earn £300 per day for just turning up and then some of them sleeping through debates and sessions. Unlike pensioners most Lords have never contributed to anything in society. Some just get a free ticket from the House of Commons to the House of Lords and most haven't done a decent honest days work in their lives and they want to rip off the elderly by taking away a free few perks. It's high time the House of Lords was eliminated. It's from a different century and longer relevant.

In reply to by anonymous_stub (not verified)

With the new pension system it's not bad if there are 2 getting the new pension but pensioners living alone on state pension are the ones that struggle the most, especially those on the old pension system. Those on GPC are better off than those who worked and paid in for 50 years as they get loads of extra benefits even though they get the £164+ a week pension, if you are on housing benefit you don't have to service your boiler, do maintenance, repairs or pay property insurance making even more unfair for those who worked and paid in. I can't use my bus pass as I can't get to bus stop due to mobility problems so I have to run my little old car on my single pension, I do under 1.000 miles a year for essential travel only from my rural area, taxi cost would be unbearable. Bus pass my mother had used to be charged every trip fixed charge which was fairer, WFA should be taxed and TV License should be available at a reduced cost but not free or end the BBC if they can't survive by advertising.

In reply to by anonymous_stub (not verified)

I have worked all my life since leaving school at 16, paid full stamp (never opted for Married Woman's Stamp), paid all my Taxes and the powers that be decided I could work ANOTHER 6 YEARS before I could retire - now they want to trump their stupidity by removing some of the entitlements I was look forward to WHEN I CAN FINALLY AFFORD TO RETIRE. The governments of this country MAKE ME SICK WITH THEIR STUPIDITY AND LACK OF GENUINE CONCERN FOR THE PEOPLE WHO PAY THEIR SALARIES AND EXPENSES. Stop fiddling with a broken system. Stop paying people to have children and sit on their backsides. I never had children (through choice) - why should I lose my entitlements that I have worked for all my life to pay for someone else to be at home. My generation made sure they could afford to look after their children themselves, not paying mothers to stay at home, not housing and paying for single parent families. Start making the younger generation WORK for their benefits, especially for having children which are a privilege and not a right. The older generation needs to stand up for itself NOW BEFORE THIS STUPIDITY GETS ANY FURTHER. THOSE WHO CAN WILL LEAVE THIS COUNTRY, AND WILL CRIPPLE IT FURTHER, IF THIS INANITY CONTINUES. AND OF COURSE LETS NOT FORGET THAT THE FAT CATS MAKING THESE SUGGESTIONS HAVE WONDERFUL PENSION POTS PAID FOR BY THE WORKING OLDER GENERATION - HOW ABOUT CUTTING YOUR SALARIES AND PENSION POTS MPS??????? LET'S START WITH YOUR EXPENSES TOO - LET'S SLASH THEM BY TWO THIRDS AND SEE HOW YOU LIKE THAT!

In reply to by Mr Robin Shugrue (not verified)

Must agree Robin, lets close down the House of Lords, as the House of Commons can do enough to keep the working class working to afford to pay these coffin dodgers.

In reply to by anonymous_stub (not verified)

If we shut or close the House of Lords the money they save on all that deadwood would fiance that bill for the tv licence for all.

In reply to by anonymous_stub (not verified)

The committee recommended what??"In both the case of Winter Fuel Payments and the free buss (sic) pass the committee recommends that people should not be given access to the benefit more than five years after reaching state pension age."If true, this would mean that WFPs would stop, and bus passes be withdrawn, five years after reaching state pension age. Is that really what the committee recommended? Or simply a case of a journalist's mistake?

In reply to by anonymous_stub (not verified)

Judging by all the comments most of the people are against these proposals and reject them wholeheartedly. But I like most of the other people feel that the house of Lords should be retired and shut down and the money wasted on them put towards pensions, free TV and winter payments

In reply to by Maureen Newman (not verified)

Best thing that could happen to these self serving grasping people who think they're better than the real hard working people of this country.

In reply to by anonymous_stub (not verified)

How about getting rid of the house of Lords that would save a lot of money.Iv worked all my life and I'm ten years before I retire and I'm happy for oaps to have free buses and the pension is one of the lowest in Europe, to our shame. As for the TV licence it's a rip off for the BBCs repeats and upper middle class attitudes. The NHS is supposed to be from cradle to grave, when did the older generation get to be so abused because they are older. Shame on the Lords

In reply to by anonymous_stub (not verified)

What planet are these people living on?!! Who gets £454 per week? !! I have had to wait an extra 6 years to get my pension and then will only get £167 per week! I agree with axing the House of Lords which would save the country a fortune as well as not have to listen to those pompous idiots who haven't got a clue what the average pensioners have to live on.

In reply to by anonymous_stub (not verified)

We should not expect anything less from this bunch of unelected, useless morons. I can't wait to see which political parties are brave enough to include these 'crackpot' ideas in their next election manifestos.

In reply to by Maureen Newman (not verified)

Fully agree

In reply to by anonymous_stub (not verified)

What a bunch of lunatics. Should be sent on a one way trip to the moon.

In reply to by anonymous_stub (not verified)

before the house of lords attack hard-pressed pensioners and the few benefits, we receive after working in my case from the age of fifteen until sixty-eight and a half they should look at themselves the greedy evil scum pay themselves three hundred pounds a day attendance, in the house of privilege and pomp sham on them all it should be abolished who needs them

In reply to by anonymous_stub (not verified)

Its all very well for those in the House of Lords commenting on what we have and should have. They have an inflation linked pension of many thousands per year increasing at the cost of the tax payer. Which is the biggest burden in the country. Millions have lost out on final salary pension schemes but not if you work for the government why dont you give up some of your pension rights to fund the bus pass for those that desperately rely on it!!!!!

In reply to by anonymous_stub (not verified)

What I think would be fair is if members of the House of Lords had their £300 per day attendance allowance removed. Many of them only go there to fall asleep and contribute absolutely nothing to the country.

In reply to by anonymous_stub (not verified)

If they just focus on those tax evading org then there will be no need to take from those that have worked hard throughout their lives. Taking away the freedom pass is a joke. Are you really asking for trouble ie more stress on NHS

In reply to by anonymous_stub (not verified)

those old members of the house of Lords are quite well off, they really have a cheek

In reply to by anonymous_stub (not verified)

Interesting comments below. My take is leave well alone as it will create an even bigger problem in the future when the younger 'intergenerationals' start to claim their pensions. The younger people need to get off their blunt end and create some wealth for themselves instead of taking shelter behind excuses and made up illnesses to get more money from the state. The establishment is another issue which should go to another referendum mmmmm.

In reply to by anonymous_stub (not verified)

I don't know how the house of lord's have the nerve, All the free loading they do they sit there a sleep wake up go have the free dinner have a bit of the hard stuff help them go back sleep when they go back in sit there all day use paying the heating bill keep them nice and warm and they get paid for it as well and all the other little perk's that go with the Title ask them if they will give all that up if we lose our so called perk's I know were the most money will be saved.

In reply to by anonymous_stub (not verified)

Why should pensioners who have always worked pay national Insurance pay it when retired also y shouldn't they still get TV licence free and heating allowance. If anything perhaps they should pay a charge for prescriptions and pay for public transport if used.

In reply to by anonymous_stub (not verified)

Perhaps what these people should do is to legalise assisted suicide and euthanasia.Then just the threat of their other proposals may be enough to solve the 'problem'.

In reply to by anonymous_stub (not verified)

Pensioners in UK suffer from the worst deal of any OECD country .UK have 29%of working wage These countries Receive More Than 100% of working wage Netherlands, Turkey and Croatia Don’t take my word for it go onto World Economic Forum We are the 6th richest country so the Government could share the wealth across society, but they like to try to turn General Public against each other .Either by age,race,religion,sex, homeless,refugees,unemployed They could make this country so much better but they only care for themselves and the rich tax avoiders the could end tax havens .MPS Monthly Food Allowance is £400 yes in 2018 that was the Allowance.Yet they cut free school meals at the cost of £340 a Year per childMany of our elder citizens are volunteers and help the young in many ways looking after grandchildren and great grandchildren.If all stopped giving their time for free many charities and families would be at a lost .The House of Privileged (Lords) Do not live in the real world and do not understand many pensioners are unable to afford heating and food .The TV might be the only company some have .We should be giving everyone help young ,middle age and old .

In reply to by anonymous_stub (not verified)

People who have worked all their lives and reach 67 or whatever the state pension age is should be able to live out the rest of the lives with dignity. Older people become more vulnerable to age related issues, such as illness. Often couples may end up having to care for a loved one or grandchildren. I feel that if somebody has worked paid taxes and made full contributions i.e over 35 years should be exempt. If somebody who has made less than 10 years or never had to make contributions but are in a position to do so should pay a contribution worked out based on their income. Over 75's television and radio maybe their only creature comforts, so they should receive that perk. I feel that older people should have a choice to either take a bus pass or TV licence if they so desire or perhaps volunteer to rescind it if they can afford to. It does or it can work the other way for younger people e.g. students receive some incentives, but going to University etc is a life choice. There are some people who receive benefits who shouldn't in my opinion and some people expect it. I agree people who really need help should be helped. Pensioners will still pay tax on their pensions so its not like the government are not getting any money to feed their coffers. I just feel older people who use bus passes won't necessarily use cars and should be encouraged to do so. Pensioners still have to pay before certain hours and pay for taxis. Older people shouldn't be discouraged leaving their home for entertainment or just sitting in a shopping centre drinking coffee. Sitting in a cafe means they are saving heating their homes so decreasing their carbon footprint. I think the government should look at those incentives to encourage older people to do other things fore-mentioned rather than stealing pensioners pay. Older people have contributed to the country and can offer so much if fee to do it such a volunteer in charity shops etc for free.

In reply to by anonymous_stub (not verified)

My wife and l only get less than £280 pension PW also these young one who they say needs the money they can claim all sorts of benefits but pensions can't claim any l have tried but because we get our pension we are told you are not entitled to any benefits yet a lot of these younger people get more per than we do and can still claim benefits is that fair NO.These people in the House of Lords would they do it if they did not get big fat pay cheques no so keep quiet do what you lot to now nothing and get well laid for it

In reply to by Maureen Newman (not verified)

Yes yes yes, wholeheartedly agree with your comments.

In reply to by anonymous_stub (not verified)

If I hadn't known better, I'd of thought it was an April-fools day prank!!! Bastards!!!

In reply to by anonymous_stub (not verified)

Perhaps these nutters could investigate how local councils up and down the country have allowed the Sopranos to gain control of our waste recycling centres ....I’m always in fear I’ll be “whacked” or at least strip searched in case I’m smuggling in a brick or a bit of turf I want to get rid of!! That would be much better suited to their brain power than trying to get to grips with something that is obviously beyond their understanding since they are so out of touch with the reality of how pensioners are meant to survive on a pittance!

In reply to by anonymous_stub (not verified)

We are all forgetting that these idiots receive approximately £300 a day, plus travel and expenses. How else would some of these unimportant ‘out of touch’ people survive, without criticising many of those that struggled in their lives, to give them an opportunity to be so critical?

In reply to by Maureen Newman (not verified)

So agree Maureen , shame on them all

In reply to by anonymous_stub (not verified)

It's okay for rich people to make rules ( inbetween sleeping in the house of lords ) that effect those who are worse off than them.....why don't they just line pensioners up against a wall and shoot us all , WE HAVE WORKED ALL OUR LIVES....AND NOT SLEPT ON THE JOB .....we have paid for those in retirement all our working lives....Shame on you Little Lord Fauntlroy & and Lord High and Mighty....some people ...in fact a lot of people have to choose between eating or heating.....you haven't a clue , none of you live in the real world

In reply to by anonymous_stub (not verified)

I am a pensioner, and I know pensioners who have to survive on just the state pension. Perhaps the Lords who concocted the recommendations which would detrimentally affect all pensioners explain how those currently surviving on just the state pension, and not even able to currently afford extortionate energy costs and council tax, etc etc will now survive these additional costs and cuts they are recommending? Obviously they are totally out of touch with reality...perhaps they should concentrate on why the head of an essential energy service is being paid £2.4 million a year, or why a local government employee was paid £0.6 million. Pensioners have earned their “benefits”. Perhaps we should start looking again at scrapping the outdated and out of touch Lords and their crackpot ideas!

In reply to by anonymous_stub (not verified)

Get them to live on the state pension for a year and don’t touch their millions see how they can cope it’s disgusting a complete joke

In reply to by anonymous_stub (not verified)

They should try living on state pension and not touch their millions see how they cope it’s a complete joke

In reply to by anonymous_stub (not verified)

Pensioner power will not stand for any cuts in future elections

In reply to by anonymous_stub (not verified)

If any government trys this they will be in trouble in any future elections mostly because pensioners will vote them out

In reply to by anonymous_stub (not verified)

Unbelievable, they do not live in the real world, that bunch of morons should be done away with as well as all the high paid M P's & Councillors, farcical, it seems as if we are being penalised for living longer, hope this is treated with the contempt it deserves.

In reply to by anonymous_stub (not verified)

How stupid upper class again what do they know about poverty in their rich fancy houses they haven't got a clue if they are so bothered let them give it all up and leave the poor pensioners alone they haven't got a bloody clue

In reply to by anonymous_stub (not verified)

I cannot believe that anyone could come up with so unfair ideas .We have already been cloblerd with unfair rise in state pension age. Time to get rid of the Lords and stop paying huge unwarranted wages to Civil servants

In reply to by anonymous_stub (not verified)

I think "Lords" lords of the super privileged and over paid, I would like to see them survive on a state pension. Get rid of the house of lords, that would save millions of pounds, they sleep through sessions anyway.

In reply to by anonymous_stub (not verified)

So once again the privileged few get to decide what the rest of us can have. And who has worked all their lives to pay for these parasitic 'lorcs'? That's right WE Have. Get rid of these leeches. They're an anachronism trying to remain relevant by stoking up hatred amo g the younger generation.

In reply to by anonymous_stub (not verified)

I think "Lords" free loading super privileged " what a disgusting attitude, they should try and exsist on a state pension. Get rid of the House of Lords, that should save the government millions of pounds, most of them sleep through their sessions anyway.

In reply to by anonymous_stub (not verified)

If they must means test these benefits they should be available to all people who have income lower than the higher rate tax payer. Just making them available to people on pensions credit means people just above or who dont claim pensions credit miss out. But the fairer option would be as stated above to pay people with income below the higher rate tax payer.

In reply to by anonymous_stub (not verified)

Where did such an impossibly meaningful word as 'intergenerational,' come from. The generations can not be and were never intended to be comparatively fair. It's why we strive to get on in life that the differences between the economic statuses emerge as between the different age groups. The Lords consideration of all this is a non sequitur.

In reply to by anonymous_stub (not verified)

I certainly don't receive 450 £ a week...I hadn't to cash in my private pension because of the hike in women's age ....I receive the 172 a week and still work !!!

In reply to by anonymous_stub (not verified)

£454 a week pension???? Is it April fools day. I get £151 and my wife gets £190 ish made up of PIP. Abolish the Lords, it serves no real purpose.

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