Ten initiatives to help young people: 3. Redressing the age imbalance
Several analysts have made the point that there is redistribution from relatively poor young people to comparatively affluent older people, and have suggested that this is unfair. Politically, the elderly have more clout because there are twice as many of the over 65s as there are of the under 25s, and they are twice as likely to vote. This means they are four times as effective in voting terms, a fact that politicians have taken account of. Popular perception of the circumstances in which pensioners live is somewhat out of accord with modern reality. The image of a woman with a blanket over her shoulders, huddled over a fire and wondering if she can afford to toss another stick onto the flames does not accord with present day reality for most pensioners. Some 86% of pensioners live in households with assets in excess of £50,000. The average income of over 65s is £15,400. A young person working on current minimum wage for a normal working week earns just under £13,000. Yet the young person is taxed while the older person is guaranteed a triple locked pension that will rise with inflation, or average earnings, or 2%, whichever is the highest. On top of this comes a winter fuel allowance, a Christmas bonus and a free bus pass.
It is doubtful if this can be sustained in the long term. Government will not end the triple lock in this Parliament because they made a manifesto pledge not to, but for the next Parliament they should consider reverting to indexing pensions in line with the consumer price index, as used to be the case. This would enable them to reduce taxes on low-paid young people.
A proportion of pensioners do live in straitened circumstances, and even though their pension would rise to keep abreast of inflation if it were indexed to the CPI, some would need additional help. If the government did abandon the triple lock in favour of rises with price inflation, they might need to establish an Emergency Relief Fund to deal with older people in poverty. Government might choose to contract out to charities the task of locating such people.
The measure would, without doubt, give government the slack it needed to ease the taxation of low-paid young people, giving help where it was most needed.