Gavin Maclure's Musings

My take on politics locally, nationally and internationally

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The OAP is extinct

From the Archive: The OAP - Extinct

From the Archive: The OAP – Extinct

The OAP, also known as the old age pensioner, seen hobbling along to the post office to pick up her pension (most were female although this had no bearing on the rate of decline) are extinct. But unlike the dodo, the UK Government has kept DNA samples aside to re-introduce the OAP into the wild again in about 30 years time.

During the next three decades, the OAP will be superseded by its very distant cousin, the baby boomer. Hardly unrecognisable from the OAP, bar the silver hair and wrinkles, the baby boomer does not hobble but stands upright – and skis. The baby boomer is so known because they were born during the post-war years high birth rate of the late 1940s to early 1950s.

The OAP was known to rely on scavenging for their state pension at the local post office whereas the baby boomer has multiple pension pots delivering a very healthy annuity, wired electronically to their Premier Bank Account.

"Let's go spend that winter fuel allowance, love!"

“Let’s go spend that winter fuel allowance, love!”

The baby boomer unlike the OAP is also the first over 60 year old species in history to be wealthier than their grown children. Previously the OAP was poorer than their children but richer than their parents.

This economic phenomenon, theorised for sometime was today proven by the UK Office for National Statistics, which showed retired baby boomers living on pensions are wealthier than their children living on a working wage.

After adjusting for inflation, the income of retired households was on average £7,100 in 1977, while working households found themselves taking him £12,600 after taxes.
By 2011/12, the income of retired households had grown 2.7 times to £19,300, while the income of non-retired households doubled from its 1977 level to £25,700.

Economists are not surprised by this. Tony Blair’s Government saw the baby boomers enter power and they made darn sure they were set up for life (at the expense of their children). Sociologists link this selfishness to the liberalisation of the 1960s. Baby boomers gave themselves winter fuel allowances to pay for their bar bill in Marbella, they gave themselves free bus passes so they didn’t have to be burdened by the cost of fuel, instead ensuring their working children reliant on their cars to commute to work picked up the tab – twice (fuel duty increases and paying for mum and dad’s bus pass). Then they stored up a nice little earner for when they will be a third (if that) of the way through their retirement: free TV licences! Yippee. Paid for by their children of course.

The baby boomer felt they wanted more of the country’s wealth though. So because of Government policies in the Labour years between 1997 – 2010, house building was drastically reduced so the price of baby boomer property would rocket. It became a fun pastime for the baby boomer to sit watching the numbers whizz round on the value of their home. Meanwhile, their children couldn’t afford to buy as a result of a major lack of supply.

Then the baby boomers in Government thought wouldn’t it be nice if we could get a cheap gardener and cleaner from Eastern Europe to look after our five bedroom house in suburbia. So the baby boomers opened the doors to mass immigration from the EU. The baby boomers got their cheap domestic labour, whereas their children couldn’t get a job.

It is believed the baby boomer will live for around another forty years. Then like the dinosaurs they will be wiped out and the OAP will, thanks to the Government policies when the baby boomers were in power, re-establish itself back in the wild. A new record will then be broken when the OAP 2.0 will be poorer than their parents were thirty years before.

Wake up Generation X!

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It’s time to take away baby boomer benefits

"Let's go spend that winter fuel allowance, love!"

“Let’s go spend that winter fuel allowance, love!”

The doddering old age pensioner no longer exists. You know the one I mean: the elderly couple on the road sign or the elderly grandmother hobbling down to the post office with her pension book. Ok, a few are holding on but, sadly, most of them have now passed on.

elderley-people-road sign

A sign of the past?

The new generation of pensioners are – shock, horror – my parents! And believe me, this baby boomer generation are not your atypical decrepit old dears who shuffle around their houses with their coat on trying to keep the cold out. My parents will be trying to keep the cold out alright – but that is to be expected considering they are climbing to Mount Everest base camp later this month! You see: pensioners today are doing very well, thank you very much.

So why are we still giving them free bus passes, free TV licences and a winter fuel allowance? Many baby boomers are bringing in more money each month through their pension annuity than their children are taking home in their salary.

And that’s why it is right for the Coalition Government’s social mobility tsar Alan Milburn (of former Labour government fame) to state in his report today that growing numbers of elderly people could bankrupt the welfare state unless better-off pensioners are stripped of their free bus pass and other over-65 benefits. Why on earth does a baby boomer couple who get a new car every year need a bus pass?

Mr Milburn is also right when he is fearful of conflict between the generations when the penny eventually drops. When those in their 30s and 40s realise they have far less money than their parents had due to wage deflation and rising prices, the chances of a comfortable retirement will seem far fetched as they watch their parents head off on another Caribbean cruise.

You just need to look around to see where the money is. As soon as a run-down terraced house in my neighbourhood comes on the market, up shoots the silver haired 60-something bloke in the new BMW to snap it off the market – for cash. He then duly does it up and slots it on the rental market for a nice tidy sum a month to pay for his Val-d’Isère trips. And I’m sure his winter fuel allowance pays for the bar bill too.

Even Prince Charles has cottoned on. His Royal Highness is certainly at the upper-end of the baby boomer wealth-scale but at least he is being brave enough to feel the wrath of his fellow pensioners by calling out the problem. In a recorded piece he addressed the National Association of Pension Funds in Manchester today and told the industry to design pensions fit for “the 21st and not 19th century” or, due to the soaring older population, young working people today were going to be “consigned to an exceptionally miserable future”. The future King makes a very good point. Most people working today who are paying into a pension have a defined contribution scheme, which means they and their employer pay into a pot each month which gets invested in stocks and shares. The majority of baby boomers now retiring have a defined benefit pension, also known as a final salary scheme, where they receive a percentage of their final salary when they retire until they die. The final salary scheme is guaranteed, was not risked on a stock market, and is significantly greater in sum than defined contribution schemes.

The case is being made that paying billions of pounds in benefits to wealthy pensioners is amoral. Politicians have always sucked up to the over-60s as they vote but it is now time for them to lead rather than chase every last ballot paper. To keep kicking the can down the road is a very dangerous game. The masses are kept in check by having food in their bellies and somewhere warm to live. Once millions of people wake up to life’s basic elements being at risk in their old age, anything can happen.

As Alan Milburn writes in his report on baby boomer benefits, correcting the inequality in the benefits system will not be without pain, and neither will be re-designing pensions, but it has to be done if we are to ensure the children and grandchildren of the wealthiest generation in history (the baby boomers) do not end up in poverty once they can physically no longer work.

I know some of my baby boomer readers will say they put in so it is their right to take out now. Unfortunately, they didn’t put in half enough.