View the article online at http://citywire.co.uk/money/article/a687363
Conservatives consider cuts to wealthy pensioners' benefits
Wealthy pensioners could face losing their free TV licences and winter fuel allowance as the chancellor tries to cut costs.
The Conservatives have joined their political rivals in suggesting universal benefits for wealthy pensioners should be cut, meaning they would lose the winter fuel allowance and free television licences.
In an interview with the BBC chancellor George Osborne refused to commit to protecting all pensioners’ benefits after 2015. In 2010, Tory leader David Cameron said the party would protect pensioner benefits and introduced the triple lock guarantee on the state pension which sees it rise at the highest of inflation, average earnings or 2.5%.
Osborne told the BBC: ‘When it comes to pensions and pensioner benefits, our society is getting older, we’re going to be spending more on our older people. I want to make sure that is sustainable.’
The chancellor, who will this week announce spending cuts for 2015-16, suggested that universal benefits received by all pensioners would be reviewed after the general election in 2015. These include free bus passes, TV licences and the winter fuel allowance, which is worth up to £300 a year. He said: ‘Of course we have got to look at how we can afford them.’
The government is already trying to curb the UK’s spending one pensioners, which is set to reach 8.5% of GDP (gross domestic product) by 2060. Although it is introducing a more generous single tier state pension of £144-a-week in 2016 it will also require individuals to work for 35 years instead of 30 years to receive it and the state pension age is due to rise to 67 by 2028.
Labour and the Liberal Democrats have already earmarked universal benefits for review. Shadow chancellor Ed Balls said earlier this month that he would look at cutting old age perks, excluding the state pension, for pensioners in the higher rate income tax band. Cutting the winter fuel allowance for higher rate taxpaying pensioners would affect 600,000 61-year olds and save the country £100 million.
He said that the state of the country’s finances meant that ‘it can no longer be a priority to continue paying the winter fuel allowance to the wealthiest pensioners’.
Deputy prime minister Nick Clegg has previously questioned why millionaire pensioners should receive universal benefits and Conservative work and pensions secretary Iain Duncan Smith has called for wealthy pensioners to give back the money they receive from benefits they don’t need.
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