Why UK politicians can’t ever take money from pensioners
Labour’s cut on winter fuel payments has, for the most part, been reversed, having proven deeply unpopular. But how did a cut, which mostly affected wealthy pensioners, become such a millstone for the government?
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In brief…
- Pensioners with an income of less than £35,000 a year will now be eligible for winter fuel payments, with Labour making a u-turn on the first policy it introduced after the 2024 election.
- The News Agents say winter fuel payments, a benefit which hasn’t increased in nearly two decades, has become symbolic of the power of older voters in the UK.
- This, they add, leaves the country in a situation where working-age people are paying tax to keep others in comfort, despite having less money and fewer assets than older generations.
What’s the story?
Labour's decision to cut the winter fuel payment for pensioners, just days after winning the 2024 election, is one that has dogged them in the 11 months since their win at the ballot box.
The then-new government discovered quickly that if there was one thing less popular in British politics than Rishi Sunak's Tory cabinet, that would be taking money from OAPs.
It gave the government's political opponents, journalists, and the public easy ammunition to condemn Labour at every turn, and has now been (mostly) reversed.
Chancellor Rachel Reeves initially said the cut would save the government £1.4bn, cutting winter fuel payments from £1.9 billion a year to £0.5bn. Now, with a new threshold of being available to anyone with an income of £35,000 or less, it will cost the government £1.25bn per year – saving around £450 million.
There has been some criticism that this new threshold is too high, and that the £100-£300 payment is unnecessary for people at the higher end of the scale.
Why taking money from old people is politics’ ultimate no-no
As Labour have learned, it’s not OK to take money from pensioners. Not necessarily for moral reasons, but perhaps more for polling reasons.
“Old people vote in higher numbers than young people,” says Jon Sopel.
“Therefore voter power rests with older people, and we are going to give them much more muscle.”
This, Lewis Goodall adds, is nothing new – but what’s changing now, with an aging population, is that there are now more older and elderly people in the UK than ever, meaning protecting their income may also mean protecting their votes.
“The winter fuel situation shows us Britain is becoming – politically speaking – a nursing home with a state attached to it, because older people are growing as a proportion of the electorate all the time,” Lewis says.
But one question remains – how did such a huge backlash emerge over the winter fuel payments, “the lowest hanging fruit” of the welfare state?
“We can't have cared about winter fuel payments much as a society, because if we did, we would have actually uprated it with inflation,” Lewis adds.
“It's been at £200-£300 quid for years. It's been depreciating in real terms.”
The political and media backlash is instead, almost certainly, a symbolic response to the cut.
“It is almost the case that no matter how minor a benefit is for old people, it is untouchable.”
“That comes against a general backdrop of 15 years where pretty much every other demographic has had serious pain.
“So I worry about the message that this sends – not just to this government, but future governments – that all of this is untouchable.”
What's The News Agents’ take?
As Labour has stated repeatedly since winning the 2024 election – the Conservative Party left a £55 billion "fiscal black hole" when it lost power.
And Jon says Labour's sweeping cuts to winter fuel payments were made because it was "horrified" by what it inherited, and reacted too quickly to start saving money.
Emily Maitlis adds that the outcry over the cuts was overblown, with most people losing the payment being "asset-rich" older people, rather than pensioners in real need.
"The poorest and the most vulnerable were protected anyway with pension credit," she says.
"It didn't affect the poorest. It didn't affect the ones who were really going to suffer.
"It was often taken away from people who did have disposable income. Why was there such an outcry?"
The media, she adds, should shoulder some of the blame for this.
"It's structurally difficult to go after older people – not least when you know it's a Labour government doing it, and you've got the right wing press against you," Lewis says.
"We're in this crazy situation now where potentially young working-age families are going to be using their taxes to pay for winter fuel allowance for incredibly asset-rich pensioners.
Research from the Intergenerational Foundation has found that in 2023-2024 government spending on pensioners was £31,000, compared to £18,000 on children, in the UK.
Lewis says many in the boomer generation have experienced a "golden goose" no other will ever see.
"They lived at a time where on almost every level, they've had it better than almost any other generation," he adds.
"Younger people have not had that, and it is unfair to expect them to continue to have higher and higher marginal rates of income which prevent them from gaining those assets, at a time when those assets of the wealthy continue to be under taxed."