Iain Duncan SmithDave Thompson/PA Wire

Universal pensioner benefits - like TV licences, bus passes and the winter fuel allowance, could be cut for better off pensioners after the next election. David Cameron has come out in defence of these benefits, and reassured all pensioners for months that they are safe. However, Iain Duncan Smith has let slip that this promise is only good until after the election - which should come in 2015.

So what will happen at that point?


The cuts

Duncan Smith may have revealed the plan for these benefits when he announced on BBC Radio Four that Cameron would not interfere with these benefits before the next general election - because pensioners needed a chance to come to terms with the implications and plan for the changes.

He added: "The Prime Minister said they wouldn't be changing anything at all in this parliament. If there are going to be any changes made as a proposal, those are the sort of changes that have to go into a manifesto but you'd have to be talking about those in advance."

The Liberal Democrats have made it known for some time that they believe these benefits should be means-tested, so that the money saved can be targeted more effectively to help those who really need the money.

This is something that the Institute for Fiscal Studies has recommended: pointing out that restricting these benefits to those on Pensions Credit would save around £1.4 million, which could be ploughed into major gaps such as long term care for the elderly.

Opposition

However, there is a great deal of opposition from groups protecting the rights of older people.

The National Pensioners Convention argues that universal benefits are essential for the majority of pensioners, because of the 11 million people over state pension age living in the UK, less than 250,000 pay tax at the higher rate.

Dot Gibson, NPC general secretary adds: "This idea that the country's economy is struggling because an army of millionaire pensioners are joyriding with their free bus passes is absolute nonsense. The economic crisis is being used as an excuse to undermine the welfare state and roll back some of our hard earned gains – many of which are necessary because the UK has one of the worse state pensions in Europe."

Saga has long argued against cutting these benefits. Ros Altmann, Director-General of Saga, points out that: "If you start means-testing pensioner benefits, many of those who need help will not get it, as they won't claim, it will cost huge sums in administration and you will be penalizing those who have saved."


"Our research also shows that 87% of pensioners feel their bus passes are vitally important and 90% said the same about their winter fuel allowance. Also, more generally, two thirds of all those over 50 think that retaining universal pensioner benefits is a fair policy. In these difficult times, it is understandable that people want to find targets to take money from. But extending means-testing for pensioners would be a move in the wrong direction."

But what do you think? Should these benefits be cut or are they a vital lifeline? Let us know in the comments.



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