Pensioner Poverty: A National Strategy Needed to Ensure Dignified Retirement

Strategic Insights -

A national strategy to tackle pensioner poverty is urgently required, according to the Work and Pensions Committee. The committee has called for a UK-wide, cross-government approach to address the issue, emphasizing that the state pension should provide a minimum, dignified, socially acceptable standard of living. Despite efforts to boost pension credit take-up, an estimated 700,000 households remain eligible but have not claimed the benefit. The committee also highlighted the need to consider a taper to pension credit to mitigate the cliff-edge effect for those who currently miss out.

Key Takeaways:

  • The Work and Pensions Committee has called for a national strategy to tackle pensioner poverty, emphasizing the need for a UK-wide, cross-government approach.
  • The state pension should provide a minimum, dignified, socially acceptable standard of living, with a guiding principle that it should be sufficient for this purpose.
  • Despite efforts to boost pension credit take-up, an estimated 700,000 households remain eligible but have not claimed the benefit.
  • The committee highlighted the need to consider a taper to pension credit to mitigate the cliff-edge effect for those who currently miss out.
  • Pensioner poverty is a significant issue, with 1.9 million people (16% of pensioners) living in relative poverty and 2.8 million living in households below the Minimum Income Standard (MIS).
  • Financial hardship can accelerate the ageing process, making it more likely that an older person will enter hospital or need care.
  • A national cross-government strategy for an ageing society and older people is needed, which could provide a framework to hold different partners to account for their role in delivering agreed outcomes.
  • The committee argued that reliance on top-ups such as pension credit and housing benefit is not sufficient to ensure people do not fall below the poverty line.

Statistics:

  • 1.9 million people (16% of pensioners) live in relative poverty, below 60% of median income.
  • Between 2008/09 and 2022/23, the number of pensioners in households below the MIS rose from 1.5 to 2.8 million.
  • The proportion of pensioners below 75% of MIS (where the risk of material deprivation increases substantially) rose from 5.9% in 2021/22 to 9.5% in 2022/23.

Sources:

  • "Pensioner Poverty report" by the Work and Pensions Committee
  • Interview with Chancellor Rachel Reeves on the review into raising the state pension age
  • Statement by a Government spokesperson
  • Comment from Emma Douglas, wealth policy director at Aviva
  • Comment from Caroline Abrahams, charity director at Age UK