Pensioner poverty on the rise again

Pensioner poverty has once again begun to increase following a five year decline, the JRF's annual report on UK poverty has revealed.

The report, UK Poverty 2019/20, revealed that around 14 million people are in poverty in the UK, of this, 2 million are pensioners, with a further 4 million children.

Whilst there was “dramatic reduction” in poverty for pensioners from 1997/8 to around 2012/13, the latest figures have revealed a rise in poverty rates for both children and pensioners over the last five years.

JRF emphasised that previous reduction showed “that real progress is possible”, but highlighted that this had “begun to unravel”.

The organisation's definition of poverty is "When a person’s resources (mainly their material resources) are not sufficient to meet their minimum needs (including social participation)."

The report stipulated that trends in poverty levels are driven by changes in four key areas: the employment rate; earnings; benefits and pensions; and housing costs.

Those in pensioner families had the lowest UK poverty rate of all family types, with London having the highest poverty rates for this subset (23 per cent), and Wales the second highest (20 per cent).

While the number of pensioners privately renting (7 per cent) was relatively unchanged over the last ten years, the percentage of pensioners privately renting and in poverty had increased, from 30 to 35 per cent.

This was attributed to rising rent prices, and inadequate increases in housing benefits.

Furthermore, this trend was also prominent in social housing, with the report stipulating that social housing had become unaffordable for many “poor single pensioner households” since 2003.

The report stated: “Pensioner households are the fastest growing household type in the UK and more affordable, secure, adaptable homes will be needed for this group soon.”

The latest figures follow The Pension Regulators DC Trust Report, which revealed that while member contributions had risen by 55 per cent over the last year, average assets per member at retirement had fallen by 43 per cent.

Commenting on the findings, Royal London pension specialist, Helen Morrissey, commented: “It is disappointing to see that after years of decline today’s report shows that levels of pensioner poverty are on the rise.

“We must not allow the good work done to reduce poverty to unravel and need to act now to prevent future generations from facing this threat. How people live and retire has changed markedly, with more people renting into retirement, and people need flexibility to meet these costs.

“While auto-enrolment has got more people investing in a pension we need to revisit minimum contributions to help people generate a decent level of retirement income."

Exploring further subsets of pensioner poverty, JRF noted that there are around 500,000 disabled pensioners receiving pension credit and housing benefit, with three in ten of these living in poverty.

It also revealed that poverty is higher among families with at least one carer, with 18 per cent of pensioner couples, and 17 per cent of single pensioner families, falling into this subset.

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