Tackling Pensioner Poverty: A National Strategy Urged by MPs

Strategic Insights -

A national strategy is needed to tackle the growing issue of pensioner poverty in the UK, with the Work and Pensions Committee urging the government to ensure a minimum level of retirement income. The committee recommends that the state pension should provide a minimum, dignified, socially acceptable standard of living, and that a plan should be created for everyone to reach this level. The report also highlights the need for a pension credit takeup strategy for England by the end of 2025, as the current take-up rate has hovered between 61% and 66% for a decade.

Key Takeaways:

  • The Work and Pensions Committee recommends a national strategy to tackle pensioner poverty, including a minimum level of retirement income and a plan for everyone to reach this level.
  • The state pension should provide a minimum, dignified, socially acceptable standard of living, and a guiding principle for the government's offer to pensioners.
  • The government should commit to a UK-wide, cross-government strategy for an ageing society to target support for pensioners.
  • A pension credit takeup strategy for England should be implemented by the end of 2025 to improve the current take-up rate of 61-66%.
  • A taper to pension credit should be considered to mitigate the cliff-edge effect for those who currently miss out.
  • The number of pensioners in relative low income started to rise again from 2010, with 1.9 million people of pension age living in relative poverty (below 60% of median income) in 2021.
  • Financial hardship can accelerate the ageing process, making it more likely an older person will need care.
  • The number of pensioners in households below the Minimum Income Standard rose from 1.5 to 2.8 million between 2008/09 and 2022/23.

Statistics:

  • Over 1.9 million people of pension age (16% of those in this age group) are living in relative poverty (below 60% of median income).
  • The number of pensioners in households below the Minimum Income Standard rose from 1.5 to 2.8 million between 2008/09 and 2022/23.
  • The current take-up rate of pension credit has hovered between 61% and 66% for a decade.
  • The government has committed to the triple lock, which will see millions of pensioners seeing their yearly state pension rise by up to £1,900 by the end of this parliament.
  • Nearly 60,000 extra pensioner households have been awarded pension credit since the bigest-ever campaign was launched.

Sources:

  • "Pensioner Poverty" report by the Work and Pensions Committee
  • Statement by Chancellor Rachel Reeves
  • Statement by a UK Government spokesperson
  • Report by the Institute for Fiscal Studies (IFS) on pensioner poverty