Spending review contains mixed news

The spending review announced on 20 October by the UK Coalition Government turned out to bring mixed news for the elderly in the country.

For people in their 50s, probably the biggest news was the increase in the state pension age earlier than was announced by the previous Labour administration. For both men and women, the state retirement age will now be 66 in 2020. This move will save some £5 billion per year.

For those in the public sector, there will be pension reforms which are designed to save £1.8 billion by 2015, and employees are almost certainly going to have to contribute more of their salary.

The good news for older people is that the winter fuel allowance, free bus passes and TV licences for over-75s are all being retained.

Cuts to local government budgets announced by Chancellor George Osborne yesterday might have a more adverse effect on the elderly. Local authorities will see their budgets cut by 28% over the next four years, taking spending down from £28 billion to £21 billion. It is expected that some important services, such as home help, community care and support for the elderly will suffer as a result.

Meanwhile, shares in the provider of the government's 'Warm Front' programme fell by more than 20% on news of cuts in spending on the programme.

Eaga saw its share price fall on the news that 'Warm Front' is being phased out in favour of 'Green Deal'. 'Warm Front' has provided households with low income and the elderly with heating improvements and insulation, but it will see its budget reduced from £345m in 2010 to £110m in 2011-12 and £100m the following year.

This is worse news than expected for Eaga, who will discuss its operational arrangements with the Department of Energy and Climate Change.

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