Pensioners have been unfairly insulated from government spending cuts and £16bn could be saved if their benefits are reduced, a think- tank says.
The Institute of Economic Affairs (IEA) says older people "enjoy a privileged position" compared to the rest of the population.
The IEA's report, Sharing the Burden, says the elderly have kept their non-means-tested benefits and their state pension is set to increase, as well as having higher personal tax allowances and marriage allowances if one partner is over 75.
Instead, the report recommends abolishing several non-means-tested benefits such as free bus travel, TV licences and winter fuel allowance.
It advocates a state pension system based on contributing for 45 years and raising the retirement age earlier than currently planned.
The IEA report also recommends changing the way in which public sector budgets are calculated so they contain an allowance for current salaries and an allowance of 20% of salary for pension provision.
If pensions cost more than 20% of salaries, cuts would be imposed, and if they cost less, there would be scope for salary increases, the report says.
"The reality is that the government's cuts announced so far only take public spending in real terms back to 2008 levels," says Philip Booth, editorial director of IEA.
"The government has imposed many new burdens on the younger generation in how it has chosen to cut and where it has chosen to raise taxes.
"These proposals should be part of a more radical review of government spending than the one on which the government has embarked. It should be stressed that this review would lead to huge tax decreases, including tax decreases that would benefit the old, such as a large cut in VAT."
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