15th January 2016 at 5:00pm
MPs to hold inquiry into financial inequality between generations
In what could be the biggest inquiry in 2016, MPs are to look at whether government policies are widening the wealth gap between generations.
The inquiry is said to have been prompted by a report from The Institute for Fiscal Studies last year that, after an “astonishing turnaround” in their finances, pensioners are, on average, £9 a week better off than those who work. And many retirees enjoy a higher income than when they were in work.
The Commons Work and Pensions Committee will look at whether measures such as the ‘triple lock’, which protects pensioners’ incomes against inflation, on top of other benefits enjoyed by retirees – for example free bus travel, TV licenses and winter fuel allowances – are at the expense of future generations.
Unfair generation gap?
With younger generations struggling to get onto the housing ladder, find employment, cope with high university fees, cuts in benefits and the end of final salary pensions, their financial futures look at lot less certain. According to the BBC, “several studies suggest those in their teens and 20s will be the first generation since World War II to be worse off than their parents.”
Richard Graham MP, Committee Member and Chair of the All-Party Parliament Group on Pensions, said: “At a time when there is significant pressure on public spending, people are living longer, pensions are starting later and care costs rising there will also always be issues about relative fairness between generations.
“How has public spending between generations altered over the years and what are the implications? The Committee will look at these issues.”
Depending on the outcome, the inquiry could encourage the government to make reforms or major cuts at a time when the state pension age is continuing to rise.
Make your views count
If you have an opinion on this and want to let your views be known, you can send a written submission to the Work and Pensions Committee inquiry on intergenerational fairness here at http://www.parliament.co.uk/ by Friday 19 February 2016.
Join the conversation
The information in this blog or any response to comments should not be regarded as financial advice and is based on our understanding in January 2016.