Pensioners Pay Rises Faster

Pensioners’ Pay Rises Faster.

New UK research have shown that pensioners are better off than the younger generation. The Institute of Fiscal Studies (IFS) found that out of all ages groups the over 60s are the only age group who have become better off since the start of the financial crisis.

This is not all good news as it is predicted that this will start a major debate on what the old age group should get out of the austerity measures. The research also shows that the younger generation are poorer. This was related to the fact since the start of the financial crisis there were record numbers of unemployment which is only recently starting to show signs of recovery.

Our View

There is growing concern about an ageing population and the conflict this presents on income, wealth and tax.  Whether pensioners like it or not, they did not pay enough in taxes or national insurance to justify the state pensions that they now draw.

The younger generation are paying more in taxes for lower future benefits.  The conundrum is quite simply this:

• As the population ages, pensioners will have an increasingly bigger say in elections - can governments afford to cut their pensions?

• Younger generation will be an increasingly smaller proportion of the electorate and face higher taxes, lower benefits and governments will not be concerned about securing their vote.