Over-75s to lose £thousands in spending review

Cuts for poorest older people equal to one third of income

The over-75s will be hit harder, relative to their incomes, than any other group as a result of the government's forthcoming spending review, according to new independent research for Age UK [1]. Published today, the research shows that the average household with someone over-75 will lose £2,200 worth of public services per year by 2014-15 - equivalent to a sixth (14%) of their household income [2].

The findings indicate that the very poorest will suffer the most from public spending cuts, sparking new fears that far from being ‘fair' the coalition government's spending plans are in fact deeply regressive. In cash terms, the poorest over-75s will lose an average of £2,030 worth of services by 2014-15 - equivalent to a third (33.7%) of their household income. And the outlook is only slightly better for the poorest 65-74 year olds, who will miss out on £1,870 worth of services by 2014-15 - just under a third (29%) of their net income [3].

Modelling the impact of spending cuts across society, the research shows that there will be serious losses for all households, but particularly for younger families with children [4] and for older pensioners. But whereas families with children will lose out mostly through cuts to education, pensioners - who tend to have lower incomes than other groups - will largely lose out as a result of cuts to social care and housing.

Age UK is calling on the government, ahead of the comprehensive spending review next month, to recognise that slashing budgets for services that people in later life rely on could have a devastating impact on the most frail and vulnerable, putting thousands of lives at risk. Additional research for the charity shows that a funding gap of £2.2billion will open up over the next four years if the chancellor cuts social care spending by 25% as predicted - leaving 500,000 of the most frail and vulnerable older people without the vital home-based care they rely on to stay safe and well [5].

Michelle Mitchell, Age UK's charity director, said, ‘In such difficult economic times, it would be naïve to assume that older people will be offered immunity from the government's spending cuts. But as people in later life are generally poorer and more dependent on public spending than other groups, they risk bearing the brunt of swingeing cuts unless government decisions are taken fairly and cautiously.

‘When the coalition entered government it promised to safeguard age-related entitlements and protect the poorest and most vulnerable in society. With the lives of thousands of older people at risk if essential care services are cut, the chancellor will not quickly be forgiven if he fails to support the oldest and frailest, who rely on public services the most.'

-Ends-

Notes to editors

1. The report, How the government's planned cuts will affect older people, was researched and written by Tim Horton, research director at the Fabian Society, and Howard Reed, director of Landman Economics, for Age UK. The research examined the overall impact of the proposed cuts to public services and the effect of tax and benefit changes announced in the emergency budget in June 2010.
2. 64-75 year old households will lose £2,000 worth of public services per year by 2014-15 - equivalent to 10.4% of their net household income. Households under 65 with children will lose £3,700 worth of public services per year by 2014-15 - equivalent to 11.2% of their net income. Households under 65 without children will lose £2,000 worth of public services per year by 2014-15 - equivalent to 7% of their net income.
3. Over 70% of households with someone aged over 70 are in the lower half of the income distribution. Nearly two-thirds of households aged 65-74 are similarly below that halfway mark. Across the population, the very poorest households are set to experience an average reduction in service provision equivalent to around 38% of their net household income, compared to 3% for the very richest.
4. As per note 2.
5. The impact of a tightening fiscal situation on social care for older people, by Professor Julien Forder and Dr Jose-Luis Fernandez (LSE/University of Kent) for Age UK, September 2010.

• For a full copy of the report, How the government's planned cuts will affect older people, the executive summary, or a detailed briefing, please contact Helen Spinney on 020 8765 7502 or helen.spinney@ageuk.org.uk.
• To arrange an interview with an Age UK spokesperson or a case study, please contact Helen Spinney as above.