Fiscal stimulus must reach the pockets of older people

The Government risks abandoning a generation of older people to the looming recession unless it includes specific measures to help them in its forthcoming Pre-Budget Report, according to Age Concern.

With older and poorer pensioners experiencing higher than average inflation, pensioner poverty rising and one in three pensioners likely to be fuel poor this winter, the charity is warning that the oldest and most vulnerable are at risk of falling victim to the economic downturn.

Though widely anticipated tax cuts will undoubtedly bring relief for many families, cuts in income tax in particular are unlikely to help the vast majority of pensioners. Age Concern is calling on the Government to use the Pre-Budget Report to protect older people from the economic downturn by announcing a package of measures which includes a higher Winter Fuel Payment and increases in the Basic State Pension and Pension Credit that more accurately reflect the real rate of inflation for pensioners.

Age Concern's key recommendations for the Pre-Budget Report:

Fighting pensioner poverty

Half of all pensioners are cutting back on essentials and one in 10 of the poorest pensioners have been forced into debt by the rising cost of living, according to recent research by Age Concern. With 2.1 million pensioners living in poverty and the real rate of inflation for the oldest and poorest pensioners around 9%, the charity is urging the Government to introduce fiscal measures that will ease the financial burden for the millions already struggling to afford the cost of living:

An emergency payment of at least £100 to all pensioners entitled to benefits.

A commitment to increase Pension Credit in line with the real rate of inflation for the poorest pensioners or average earnings, whichever is higher.

A high profile campaign to promote the take-up of up to £5 billion in unclaimed benefits and a commitment to introduce a national system of automatic payments.

Taking the heat out of fuel poverty

Over five million UK households - half of whom are pensioner households - are classed as fuel poor. With one in three pensioner households likely to be living in fuel poverty by Christmas, Age Concern is calling for strong and decisive government action to help the poorest pensioners and families who are struggling to afford their bills:

An increase in the Winter Fuel Payment of £50 to all pensioners.

A commitment to deal with unfair pricing by tackling overcharging customers who pay their bills by cash, cheque and pre-payment meter, and introducing mandatory social tariffs to ensure the poorest do not pay more for their energy.

An increase in the maximum grant available for Warm Front and changes to its eligibility criteria to help the poorest households living in energy inefficient homes.

A new fuel poverty strategy supported by a fair funding formula that recognises windfall gains to energy companies and increased VAT revenue due to recent price hikes.

Improving health and social care

Unless emergency funding is found for the country's creaking social care system, it will continue to fail millions of vulnerable older people at the very time they need the most support. In advance of next year's Green Paper on Social Care, Age Concern is calling on the Government to commit to an injection of cash into the system:

An immediate £1 billion minimum funding injection to prevent further deterioration in quality and restrictions in eligibility in social care - creating thousands of jobs.

An independent review of the debt financing of the residential care sector.

An increase in the Personal Expenses Allowance to £40 per week (from £21.15).

A package of funding to implement health prevention measures for older people to help them stay independent, including £200 million for footcare services.

Recession-proofing the older workforce

The economy will need its army of older workers to boost labour supply and consumer demand as it moves out of recession. With previous experience showing that older workers are more likely to bear the brunt of large-scale redundancies in a recession, the charity is warning that measures to maintain and renew the skills and abilities of older workers will be absolutely essential:

Intensive support should be available to over-50s on benefits and out-of-work after three months.

There should be no further increase in conditionality for long-term unemployed over-50s.

Mandatory retirement ages should be scrapped.

Age Concern's Director General, Gordon Lishman, said: "Millions of older people will be looking to the Government to deliver a Pre-Budget Report that lives up to its rhetoric on fairness, and eases their financial pressure and uncertainty. Alongside tax cuts, which are unlikely to help the majority of pensioners, the Chancellor must also announce specific measures to help pensioners such as increases in the Winter Fuel Payment and Pension Credit that truly reflect the high cost of living. The Government must ensure that its fiscal stimulus package does not ignore the needs of millions of older people who are quickly running out of ways to pay their bills."