MPs have urged the government to commit to a UK-wide, cross-government strategy to tackle pensioner poverty, warning that if it doesn't effectively address this issue, it will not be able to achieve its goal of building a sustainable health and social care service.

The comments were made as part of the Work and Pensions Committee's (WPC) report following its inquiry into pensioner poverty, which identified "concerning" longer-term trends that “threaten to undermine pension adequacy”, such as the climbing number of people renting in the private sector during retirement.

The report made a specific number of recommendations to address these concerns, including calls for the government to decide on and ensure a minimum level of retirement income.

"One in eight pensioners rely solely on the state pension, and it makes up 80 per cent of the retirement income of the poorest pensioners," the report stated.

"The Pensions Minister said to us that the state pension formed the ‘bedrock of government support’ for pensioners, yet we heard that many of those who rely on it are experiencing financial difficulties and hardship."

The WPC said that, given that the state pension is the core of the government’s offer to pensioners, relied on by many on low incomes, a guiding principle should be that it provides the amount needed for a ‘minimum, dignified, socially acceptable standard of living’.

It also said that, once an objective for the state pension relating to adequacy has been agreed, the government should put in place a plan for getting everyone to that level.

The first step, according to the committee, should be to review those aspects of the state pension and benefits system that undermine its adequacy for some pensioners.

The evidence received by the committee suggests that this includes: low outcomes for some from the old state pension system; the pension credit ‘cliff-edge’, where people just above pension credit level can miss out on thousands of pounds of passported benefits; the ‘mixed age couple’ rule, which can mean people in their seventies still receiving working age benefits; and the implications of a rising state pension age.

An opportunity for change?

In particular, the committee said that the forthcoming pensions adequacy review represents an "opportunity" to consult on objectives for the state pension, taking account of adequacy, sustainability and fairness.

In addition to this, the committee said that the pensions adequacy review should consider pension inequalities and the groups who are more likely to live in poverty in retirement, including women, disabled people, unpaid carers and certain ethnic groups—and how this should be addressed, and how this will be addressed.

However, it suggested that better reporting and data will also be needed to address inequalities, warning that "sporadic" reports on the size of the gender pensions gap are insufficient to track whether the situation is improving.

As such, it recommended that the government commit to reporting on the gender pensions gap at least every two years.

The committee also warned that the fact that the review is forward-looking must not lead to the needs of current pensioners being overlooked.

Work needed to address pension credit 'scandal'

Pension credit was another key theme in the report, as the WPC urged the government to build on its recent work to tackle the "scandal" of low pension credit take-up.

The committee agreed with the Pensions Minister that the message should be that it is worth claiming and that the department is there to support people in doing so, with evidence heard during the inquiry suggesting that the main barriers to claiming relate to pride, and a feeling that 'benefits are not for people like me'.

However, the committee disagreed with the Minister's suggestion that trust levels have no impact on older people’s willingness to claim, pointing out that trust issues exist between working-age people and the department, which will endure as they reach pension age.

"The department should put in place the resources needed to process claims in an efficient and timely manner and helpline advisers able to give the advice needed to navigate the system in more complex cases," the committee stated.

Concerns were also raised about the impact of state pension age increases on poorer communities with lower life expectancy, with the government urged to publish an impact assessment of the planned rise from 66 to 67 by the end of 2025, alongside any plans to mitigate the impact.

A 'concerning' trend

In addition to this, the report highlighted concerns over the trend towards renting in retirement, citing research from the Pensions Policy Institute that suggests the number and proportion of pensioners renting privately will grow from around 6 per cent now to 17 per cent in 2041.

Given this, the WPC said that the government should assess the impact of the Local Housing Allowance on pensioners and whether it leaves them with the income needed, and report back to the committee by the end of 2025.

However, it also agreed with the Pensions Minister's suggestion that some of the longer-term solutions lie outside the social security system.

"We heard that trends in housing tenure will mean increasing numbers renting privately in retirement, which is associated with pensioner poverty," the committee stated. "We hope the reviewers will look at what changes in housing policy are needed."

Commenting on the report, WPC chair, Debbie Abrahams, said: “Poverty is insidious. It isolates, damages health, and strips you of dignity. After decades of contributing to society, dignity in retirement is the least you deserve.

“But too many are forced to make sacrifices that will accelerate their ageing because they don’t have enough to live on.

“Faced with a combination of high energy costs, ill-health and ever higher rates of pensioners in more costly privately rented accommodation, tackling pensioner poverty is not simply a DWP issue.

"So, we’re calling for a nationwide, cross-government strategy for an ageing society that should be rooted in equity and wellbeing.

“Earlier this week the government relaunched the Pensions Commission that will look into how future pension savings could be boosted to help future pensioners. While we welcome this, we are keen to ensure that those reliant right now on a state pension that leaves them short are looked after too.”

The committee also provided some insight into the potential focus of any future work, stating that whilst dashboards are not covered in this report, the committee will "return to" this issue in future.

---