Pensioner poverty on rise

Some of the very poorest pensioners are missing out on billions of benefits, despite the introduction of Pension Credit to reduce pensioner poverty in 2003. This is according to Age UK’s Chief Economist’s Report published today, which analyses the latest government figures of key issues affecting older people and shines a spotlight on poverty and inequality among pensioners. 

The number of people living below the poverty line increased from 13% in 2012/13 to 14% in 2013/14. Today, the total number of pensioners living in poverty sits at the 1.6 million mark, with around 900,000 of those living in severe poverty.

This deep-rooted problem can be partly explained by the huge numbers of pensioners who don’t claim the benefits they are entitled to. Around £3.7 billion in benefits intended specifically to help low-income pensioners goes unclaimed each year.

The latest official figures show that around 1.3 million people entitled to Pension Credit, which tops up the income of the poorest pensioners, did not claim this vital benefit in 2013/14. This is an estimated average of around £2,132 per person per year. In addition, around 260,000 pensioners missed out on Housing Benefit during the same period therefore sacrificing £3,224 each a year.

Age UK is warning that tens of thousands of pensioners are struggling to afford the basics every day and is once again calling on the government to develop and implement a national strategy to tackle the scandal of pensioner poverty across the UK.

As well as facing a daily challenge to pay for essentials such as food, clothing and energy, around 2.7 million older people are stuck at home and unable to go on a social outing, even just once a month, while 1.2 million pensioners could not replace their cooker if it broke down.

Age UK’s analysis also shows worrying signs that inequality among older people is increasing again due to the incomes of poorer pensioners falling faster than those in the top or middle income groups. In real terms, between 2010/11 to 2012/13 incomes of the richest 10% of pensioners dropped 3.8% from £833.95 to £803.00, whereas those in the poorest 10% saw a drop of £165.26 to £156.00 – a 6% fall over the same period.

Comments

In response to the report, Caroline Abrahams, Charity Director for Age UK, said: ‘This report shows that the older population is increasingly diverse and characterised by stubbornly persistent levels of poverty.

‘The fact that there is appreciably less pensioner poverty than a generation ago is an achievement we should all be proud of but it’s important to remember that there are still 1.6 million very poor older people struggling to make ends meet, with many more apparently heading the same way.

‘Worryingly, the poorest pensioners are losing ground the fastest, leading to a widening gap between 'the haves and the have-nots' among those in retirement.

‘We urgently need a concerted effort to help the most vulnerable. Better access to good quality information and advice, and increased take-up of pensioner benefits would be a good start.

Professor Jose Iparraguirre, Age UK’s Chief Economist and author of the report, said: “Most commentators opined that the summer 2015 Budget left older people untouched. Yet in view of the unacceptable levels of material deprivation and the alarming number of poor pensioners missing out on the benefits they are entitled to, “no news” in this case seems to be “bad news”. This report shows there is a lot to do on behalf of those who are most in need.”

Are you worried about money or looking for help?

If you are an older person, we have information on our website about ways you might be able to get help that may be available from to you.

You can check your benefit entitlement using the Turn2us Benefits Calculator or find out whether you are eligible for charitable grant using our Turn2us Grants Search.

The Turn2us Your Situation online section contains resources such as managing money, including useful links and a Find an Adviser tool tool to help you find national and local sources of further help.

You can also get tips on managing your money. 

Source: Age UK Chief Economist's Report 

Date of publication: 28 July 2015