The Changing Dynamics of Age and Benefits
We had lunch on London’s Southbank, my friend and I, after a long period of not seeing one another. She had recently turned 60, which happened to me a couple of years ago. As we headed for our trains south at Waterloo Station, I pulled out my 60-plus Oyster card, which grants me free travel across the capital, and made a glib comment about some things being better as you got older. She stopped dead and glared at me with the kind of look I’d have expected if I’d confessed to voting Reform or admitted I’d like to see beggars forcibly removed from the streets.
“I won’t be applying for one of those,” she said sternly. “It isn’t right that people like us get free travel. We can easily afford it. It’s our kids who need this kind of help these days.” Shocked, I stuttered something about how yes, she was right – but the way I saw it, using freebies I was entitled to meant I could afford to share more of my income with people who needed it more than I did. On the train home, though, I turned over what she’d said – and by the time I reached my front door, I could see she was right. Free London travel for some of the most advantaged people in the country – many of them still, as I am, earning money just as we always did through work – doesn’t make sense.
A Shift in Financial Burden
There are growing calls for a shift in the financial burden, from the younger to the older generation. Earlier this week it was revealed that the Treasury is looking to overhaul the way stamp duty is paid, with the cost being borne not by buyers (as it is now) but by sellers. The thinking is that it’s those who have property to sell who should pay the tax when they realize their profits – and they tend to be older people who’ve been hanging on to their properties, often for many years.
The Treasury has not commented on the proposals, but I know many who agree that it’s time for a rethink on the benefits enjoyed by wealthy older people. A free Oyster card (you can’t use it first thing on weekdays, but otherwise it grants me free travel all through the week and weekend in London) is only one of the perks of ageing. Others include a senior railcard, entrance discounts to museums and art galleries, reduced prices at cinemas, even low-price meals in pubs.
The Changing Reality of Age and Wealth
Underpinning all of these benefits is an assumption that older people are less well-off people. But the truth is that in Britain today, over the last few years, that reality has been turned on its head. The thinking was based on the outmoded idea that young people were largely debt-free and beginning to earn the sorts of money that would allow them to buy a home and to live a comfortable life. Older people, by contrast, have reduced incomes and have ‘done their bit’ for society’s coffers; the perks of later life were in part devised as a thank-you for all they’ve done and contributed.
But much has changed. Today’s 20 and 30-somethings – like my own children – are saddled with large student debts. The average is now £53,000 on graduation, and with tuition fees set to rise by around £250 a year, that debt will spiral higher in the years ahead. So young people are in debt before they even begin to consider a mortgage; and getting a mortgage is increasingly difficult, with the loan-to-income differential increasingly out of their reach, especially in urban areas.
The Debt Burden on Younger Generations
My husband and I took out our first mortgage, without any parental help, when we were 25 and 23 respectively, in London, on journalists’ salaries (which were never high, even back then). Last year my daughter and her partner finally managed, aged 30, to buy their first flat just round the corner from where we bought ours all those years ago: their loan-to-salary differential was around six to one, compared with ours at three to one. In other words, our children are having to save much harder, for a lot longer, to pay loans that are much higher than ours were – and all this on top of high existing debts for their education.
So the debt burden falls heavily on the younger generation – and meanwhile, most over-60s (more than nine in ten of us) have paid off our mortgages. And of course we didn’t have to pay off student loans – in our day, education to graduate level was free, and we were even given our living costs back then. No surprise, then, that it must seem a little strange, from where my daughters (aged between 23 and 33) sit, that my husband and I swan around London gratis, while they have to pay for their travel.
Travel as a Major Expense
And travel is a huge burden on young people, both in the capital and across the country – it’s a big reason ‘work shy’ Gen Z want to work from home so much. In the long-term, subsidising older people’s travel while charging low-earning, up-against-it youngsters the full whack, will have to be reversed. And the penny is beginning to drop: last week a report by the House of Commons Transport Committee recommended free bus passes for under 22-year-olds in England (they’re already in place in Scotland).
Once the case starts to be made for more benefits for younger people, it won’t be much time before the spotlight falls on the people who already get those advantages, and questions are asked about whether it should continue.
Rethinking Universal Benefits
For some, universal benefits are a gold standard – we meddle with them at our peril, they argue. But it’s hard to make that case, I believe, in a UK that’s struggling to afford an NHS that continues to pledge to meet the needs of all; surely it would be better to divert funds from those who could comfortably afford to pay them, and to boost the health service? And even despite the massive furore last year over removing winter fuel payments as a universal benefit for older people, the eventual U-turn by the government, while it allowed payments to continue to many more of them, did remove the bottom rung on payments for all (those with an income of over £35,000 no longer get the benefit).
It’s important to say also that this bottom qualifying rung is essential: free travel and other benefits shouldn’t be removed from those who genuinely need them. What I’m arguing against is the wisdom of this help being universal at a time when many – but not all – older people have more than enough, certainly in comparison with younger folk.
Beyond Benefits: Supporting the Next Generation
Should we go even further? Last month an influential think tank in Germany suggested a “boomer solidarity tax” for high-earning pensioners. At a time when more of the country’s wealth will go on supporting retirees via their state pensions, the case was being made for a levy on better-off retired households, which would be used to help pay for their less well-off peer group, thus reducing the Boomers’ burden on Gen X, Millennials and Gen Z.
It may be a while before similar suggestions are made here, if only because the state pension in Germany is considerably higher than it is in the UK. But the principle of the argument is hard to deny: we over-60s are plentiful, and comparatively well-off, while the younger generations are numerically fewer, proportionately less well-off, and yet required to shoulder our state pensions.
Despite all this, I won’t be following my friend’s approach and giving back my Oyster card. Because here’s another thing to add to the mix: my husband and I spend far more of our money on helping out our kids – with a place to live into their twenties, with help with payments, with childcare, with holidays. Neither my parents or my parents-in-law were spending anything like the money we are on their children, at this stage of their lives. So in truth we don’t feel all that well-off. But we know we should share what we can, and we’re happy to do so.
Not everyone, though, can make the choices we can. So it’s not, I fear, about turning down a free Oyster card. The changes have to be a lot deeper, and more far-reaching – so the whole of society can benefit, tomorrow as well as today.
