Sunday, February 17, 2013

Britain Shortchanges Young People


This week's Economist points out that it is the young that are bearing the costs of austerity measures while at the same time, politicians keep making entitlement programs for the elderly sweeter.


Britons below retirement age are indeed in it together. The working-age poor are being pinched by a cap on welfare payments. Wealthy parents have been stripped of child benefit. University tuition fees have rocketed. Everyone is paying more VAT. But austerity seems much less austere if you are old. Pensioners, who fared notably well in the boom years, have been coddled in the bust.
Whereas public-sector salaries and benefits for working-age people are set to rise by a miserly 1% a year over the next few years, pensions have been “triple-locked”: they increase by average earnings, inflation (currently 2.7%) or 2.5%, whichever is higher. Perks such as free bus passes, free television licences and winter fuel payments have not been touched (although Mr Osborne is daringly pondering whether to axe fuel subsidies for Britons who have retired to sunny Spain).
This week another gift arrived. At present old people who need long-term care for conditions like dementia must pay for much of it. Some have to sell their houses and run down their savings until they are left with £23,250—at which point the state steps in. Jeremy Hunt, the health secretary, finds this intolerable. On February 11th he announced that the state will take over when people have paid £75,000 towards their own care. And nobody will be forced to sell their house.

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