On the go: After more than two decades of virtually continual falls, pensioner poverty has shown a stark rise.
A report from the Institute for Fiscal Studies shows that relative pensioner poverty rose from 13 per cent in 2011-12 to 16 per cent in 2017-18.
Unexpectedly, income from private pensions fell by 20 per cent in the past six years. The decline was concentrated in the latter half of the period: between 2014-15 and 2017-18, income from private pensions fell by 19 per cent while average housing costs for low-income pensioners increased at a much faster rate in recent years.
Between 2011-12 and 2017-18, housing costs rose by 16 per cent, more than five times the increase in the preceding six-year period (3 per cent), with rents proving a big drain on pensioner incomes.
Women born in the 1950s, the most severely affected by the rise in the state pension age, saw a rise in relative poverty rate of 9 percentage points in 2017-18.
Commenting, Tom Waters, research economist at IFS and another author of the research, said: “Severe income and expenditure poverty rates are little changed, and rates of material deprivation – which measures whether households feel unable to afford basic items such as keeping the home warm – have clearly declined, with falls seen across the income distribution.
“While these results suggest that very low living standards have not become more common, they do not tell us what has happened to the frequency of destitution, such as rough sleeping.”
Tom Selby, senior analyst at AJ Bell, added: “The headline finding that pensioner poverty has risen for the first time since 2011-12 is particularly surprising, given the state pension triple-lock now provides iron-clad protection for older people’s retirement incomes.”
He said the fall in pensioner income “may have been skewed by the pension freedoms, however, with full withdrawals using the flexibilities introduced in April 2015 not included in people’s income data. It is vital the government now gets under the skin of this information in order to determine any potentially worrying trends”.
