Printer Friendly

State could bulk buy and give pensioners cheaper rate power.


ONE hundred and four years ago and thanks to a Welsh Chancellor of the Exchequer, the British Government granted the first pensions to its citizens.

Those entitled, when David Lloyd George was in charge of the nation's finances, had to be men of "good character" over the age of 70 who had not been in the workhouse.

Since then all of us have become eligible for a state pension when we reach retirement age, but are our older generation better off? Ironically, perhaps, the five shillings paid out in 1909 was, according to pensioners' support groups, equivalent to 25% of the average earnings.

Compare that to the situation today where the state pension is equivalent to only 17% of an individual's average pay.

In such a situation, it is probably not surprising to find that many pensioners are now going back to work to supplement what they get from the state.

The latest data showed that, in the past three years, the numbers of adults aged 65 years or older who are in employment in Wales has increased by 28%, and they currently account for 60% of the increase in employment for the period 2009-12.

Other factors have also probably influenced this trend. First of all, it is clear that pensioners are not getting much from their savings as, thanks to the lowest interest rates in history, the interest on savings accumulated throughout a lifetime of hard work is currently at a record low.

Secondly, for those lucky enough to have private pensions, the actual value of pension funds has fallen dramatically, meaning that many will have to wait until the stock market recovers to get any decent return on their retirement income.

Finally, an increasing number still have to pay off debts, with a recent report showing that one in five pensioners are in the red on the day they retire, owing an average of PS31,000.

In fact, hundreds of thousands of pounds are still outstanding on interest-only mortgages due to the fact that many endowments, thanks to the recent financial crisis, simply failed to deliver the returns promised.

In addition, the insurance company Prudential estimated recently that people planning to retire this year expect to be living off the lowest average incomes recorded in six years, with those retirees being expected to be around PS3,400 a year worse off than workers who retired in 2008.

However, it is those on the basic state pension of PS110.15 per week who face the biggest challenges, especially in paying basic bills.

Indeed, it is worth noting that, whereas the average annual spend on gas and electricity for the over-65s was PS669 in 2005, it had soared to PS1,356 last year, representing nearly a quarter of what they get from the state pension.

Given this, is it really surprising that many are facing a difficult choice between going hungry and keeping warm, resulting in greater incidences of cold-related illnesses? We are supposed to be living in a civilised advanced economy and yet, in 2012, there were more than 20,000 excess winter deaths of older people in the UK, higher than in any other European country.

One can only imagine the horror of the figures that will be released after the bitterly cold spring we are currently experiencing.

And, with Wales having a higher proportion of older people than the rest of the UK, the situation is probably even worse here. Indeed, it is estimated that more than 100,000 pensioners in Wales will have turned off their central heating during the recent cold spell.

Perhaps the answer with this annual problem lies with using the ability of the public sector as a purchaser. For example, if the UK and Welsh Governments examined how they could ensure discounted purchases of electricity and gas, then both could provide these services at a vastly reduced rate for those receiving the state pension.

All governments of the past 50 years seem to have conveniently ignored this issue. A solution that delivered a "pensioners' tariff" would ensure that politicians, rather than spouting the usual empty rhetoric about the importance of looking after the older generation in our society, actually acted and used the massive purchasing power of government to do something positive that will improve the standard of living of those who need it the most.


Many pensioners are facing a difficult choice between going hungry and keeping warm
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2013 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Geographic Code:4EUUK
Date:Apr 6, 2013
Previous Article:Hodge in first deal with commercial mortgage specialists Ref Cap.
Next Article:Cuts to red tape saving businesses millions come into force today.

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters