Dr Joe Chrisp is a Research Associate in the Institute for Policy Research (IPR) at the University of Bath. Professor Nick Pearce is Director of the Institute for Policy Research (IPR) and Professor of Public Policy at the University of Bath.

The Resolution Foundation has published its overnight post-Budget analysis, and it has some very interesting material on the demographic impact of the Chancellor’s tax and benefit reforms. Pensioners are the biggest losers, principally because the Chancellor has chosen to cut National Insurance, which is not paid by retirees, while increasing the income tax collected from them via fiscal drag on tax thresholds. The chart below shows this very clearly for individuals by employment status:

Back for more?: Putting the 2024 Spring Budget in context, Resolution Foundation, March 2024

What’s more, pensioner age households are set to lose out most overall from all the tax and benefit changes announced in this Parliament. Unsurprisingly, this has not gone unnoticed in the conservative-leaning press.

Back for more?: Putting the 2024 Spring Budget in context, Resolution Foundation, March 2024

The Chancellor appears to be taking aim at the heart of the Conservative core vote: the so-called ‘Grey Wall’.  This is the older, 55+ electorate that was the bedrock of the Conservatives’ general election victories in 2015, 2017 and 2019, and which played a critical part in the electoral coalition that voted Leave in the Brexit referendum. It has much higher registration and turnout rates at elections than younger voters, and so exercises considerable political clout. We have argued on this blog and elsewhere that after 2010, the Conservatives created a political economy in which the interests of older voters were prioritised: through the ‘Triple Lock’ pensioners were largely spared the effects of austerity in social security, while older homeowners benefited from fiscal support to the housebuilding sector. Simultaneously house prices and other assets were inflated by low interest rates and Quantitative Easing. Both fiscal and monetary policy helped cement the Grey Wall.

Of course, there are other dimensions to this politics of age and political scientists typically stress the importance of education and cultural values to explaining age divides in party preferences and allegiances. But the material interests of older voters, particularly homeowners, were clearly privileged after 2010 and have not been since 2019.  In recent fiscal events, the Chancellor has targeted his limited largesse on the working age population, through National Insurance cuts, free childcare and reforms to the High Income Child Benefit Charge threshold and taper. This has taken some of the pain away from increased income taxes and higher mortgage payments for working age homeowners (while at the same time pencilling in undeliverable cuts to public spending after the general election).

So what explains this shift in strategy? Arguably, the post-Covid spike in interest rates and withdrawal of QE has undercut the UK’s growth regime, so that the Chancellor can no longer look to loose monetary policy and asset inflation to generate growth.  The pressure on working age living standards has also made untenable a strategy of insulating pensioners from fiscal policy pain. And pensioners are also enjoying the upside of higher interest rates, through better returns on their savings (assisted by a very generous ISA policy framework). As the Resolution Foundation points out,


Pensioners in general cannot be considered to be a low-income group; the triple lock has led to increases in the state pension not just in real terms but also as a fraction of average earnings; and the recent rocketing of interest rates has boosted savings income (particularly benefiting pensioners) while hitting predominantly working-age mortgagors.’


Politically, the Chancellor has also avoided direct confrontation with older voters’ material interests: he has not taxed their wealth directly, nor cut the Triple Lock. His tax increases on pensioner incomes are stealthy. He may simply be seeking to stem the losses in Conservative Blue Wall seats like his own in Surrey, where the private sector middle class vote is critical. For now, their lead with pensioners and older homeowners is still secure.

There will still be a marked age divide at the next election, even if the Conservative vote collapses. But a shift in the UK’s political economy has taken place. We may face renewed austerity in the public sector, but the electoral coalition of the Osborne era, in which older homeowners were the dominant bloc determining electoral outcomes, is unravelling.

All articles posted on this blog give the views of the author(s), and not the position of the IPR, nor of the University of Bath.

Posted in: Culture and policy, Data, politics and policy, Democracy and voter preference, Economics, UK politics


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  • It may just be rael politik: older people are either so fixed in their views that they would never think of voting other than Tory, or - especially those of us who are children of the 60's - could never bring ourselves to vote that way.