Guest blog: Independent Age

Written by Phil Mawhinney, Policy Manager, Independent Age.

A moment of crisis  

We are experiencing a cost of living crisis, with the price of essentials – gas, electricity, food – rising more quickly than any time since the early 1990s. Prices will rise even higher with the £700 jump in energy prices coming in April 2022.  

At Independent Age – a charity supporting, and campaigning with people in later life and their families – our free helpline has had an increase in people calling with worries about their bills. We have heard about people surviving on soup or boiling their kettle once a day so they can afford to turn on the heat.

The cost of living rises are even more concerning when, at the same time, there is a steady rise in poverty among people in later life. In 2012, 1 in 8 older people were in poverty, and this rose to 1 in 5 by early 2020 at the eve of the pandemic. 

Who is in ‘pensioner poverty’ and for how long? 

With these short and long-term problems, it is hugely important to better understand ‘pensioner poverty’, including the causes and, most importantly, how to help people avoid it.  

Poverty in later life – our report published in January – is based on new analysis by City, University of London. It shows that some groups of older people are more likely to be living in poverty, including: 

• People renting in the private or social sector. 
• People from ethnic minority backgrounds. 
• People living alone. 
• People aged 85+. 
• Women.

It is easy to assume that people are either permanently in poverty or not. But in reality things are much more changeable. One of the unique insights from our work is how often older people move in or out of poverty. For example, over a two-year period, 4% of people above the State Pension age ‘entered’ poverty – on top of the 11% already there.

This is different for people in different situations. For example, single older people and people from Black and Asian backgrounds were more likely to enter poverty during that two-year period.

This fluid picture means a lot of older people experience poverty within their later life. When looking at how people’s income changed over 9 years, the researchers found that two in five people (40%) spent at least one year in poverty in that time. This is not a small problem. 

How do older people get out of poverty? 

Our report shines a light on why older people move in and out of poverty, which can help us think about interventions to prevent people experiencing the stress and harm of poverty.  

The evidence suggests that loss of social benefit income – from welfare entitlements like Pension Credit – is a big cause of older people being in poverty. Three in five (61%) people who entered poverty saw their social benefit income fall.  

What benefits do people in later life lose and why?

The death of a partner is one common experience that, as well as causing grief, can throw people’s finances into a confusing and difficult state. Many people in this situation may be entitled to things like Pension Credit or Council Tax Reduction but be unaware and therefore not receive them. We are doing more research into why people lose benefits which we hope will help us come up with suggestions for how people can be supported at those critical moments. 

What does this all mean? 

Firstly, it shows how important it is that everyone receives the money they are entitled to – it is the main way people get out of poverty. 

The problem is there are a range of entitlements that people should receive but often don’t, for example Pension Credit, Attendance Allowance and Housing Benefit. Getting these can make a huge difference.  

Our Credit Where It’s Due campaign highlights that 1 in 3 older people who should receive Pension Credit don’t. This means they could also be losing out on over £7,000 a year in the extra support Pension Credit links to, such as help with rent, council tax and energy bills. 

The Government must act

There will always be some people who don’t receive the support they are due, and this could be for various reasons, e.g. lack of awareness of what’s available, people assuming they aren’t entitled to anything, or a lack of access to the Internet.

So, secondly, there is a huge role for the Government to take action to get that money into people’s pockets. We think an anti-poverty strategy is needed.

We’d also like to see the Government produce a Pension Credit action plan, including new and ambitious ways to make sure people get the support they need. We welcome recent efforts by the Government to raise awareness of Pension Credit but ultimately it’s not working – new statistics show 1 in 3 people eligible are still not receiving it.

With the cost of living crisis rising, it’s vital that action is taken now to improve the lives of older people living in poverty.

If you’re not sure whether you, or your friends or relatives, are getting everything that is owed, you can check by calling Independent Age or using the Turn2us Benefits Calculator.