One of the standards by which any society measures its decency is its generosity towards the old. The Prime Minister, David Cameron, harped on this theme at the weekend, announcing that pensions would rise by at least 2.5 per cent a year over the next parliament if he were re-elected in 2015. “In a civilised society, knowing you’re going to have a decent state pension is a really powerful thing,” he said.
A whiff of political calculation naturally accompanies the Prime Minister’s moral fervour concerning the need to grant people “dignity and security in their old age”. With the next general election less than a year-and-a-half away and with the Conservatives still lagging behind Labour in the polls – although by a smaller margin than a few months ago – Mr Cameron’s strategists are urging him to hunt down the one in three people who voted Conservative in 2010 but who do not plan to do so in 2015, according to the most recent polls.
The importance of pensioners as a voting bloc, meanwhile, has increased with every election, as the number of pensioners continues to rise both absolutely and proportionally. Already, 10 million Britons, or one in six of the population, are over the age of 65, while that number is expected to reach 19 million, or about one in four, by 2050. Back in 1908, when Britain introduced pensions, only half a million people were deemed eligible to receive them, although the age threshold, admittedly, was then set at 70.
Political strategists are also aware that pensioners also vote more than other age groups. In the 2010 election, 76 per cent of over-65s cast votes, compared with only 44 per cent of those aged 18 to 24.
Mr Cameron may have a direct interest in seeking to be recognised as the pensioners’ friend, but this does not mean he is wrong to concentrate attention on this particular age group. It has become popular in some quarters to suggest that pensioners are being treated with kid gloves while younger age groups bear the brunt of the cuts, but this discourse should be rejected. It is not the case that pensioners get a good deal in modern Britain. On the contrary, we still treat the elderly in a miserly, begrudging fashion, and, if the basic state pension has risen markedly in the last few years, it has done so from a dismally low base.
The maximum basic state pension is still only £110 a week, or about £5,000 a year, a pittance in a country where fuel and food bills are so high.Moreover, massive changes are taking place in the workplace in the UK, marked by a rise in the proportion of self-employed and part-time workers alongside shrinkage in the public sector. These trends mean that fewer people can expect to receive either a secure public-sector pension or a comfortable private-sector pension, let alone one based on their final earnings. Final-salary pensions are vanishing from the landscape; only 1.7 million people remain in such schemes compared with five million 20 years ago.
Near-zero interest rates, furthermore, have wrecked the expectations of those who planned to top up their pensions with the interest earned on their savings.
While a significant minority of Britons can look forward to a very comfortable old age, therefore, the prospects for pensioners overall remain bleak. For all the Prime Minister’s soothing words about ensuring that people have “dignity and security”, millions of us clearly will have neither. Only a quantum rise in the state pension would ensure that standard was met, but whether any party will ever be courageous or foolhardy enough to propose such a drastic remedy is unlikely.