Yahoo Finance Pensioners living in poverty at highest level since 2012
The number of pensioners living in poverty has risen to the highest level in a decade, with millions falling into financial hardship.
More than 2.1 million over-65s live in poverty in Britain, the largest number since 2012, of which more than half are in “severe poverty”, according to figures from the Department for Work and Pensions.
Those over the age of 85 were at the highest risk of poverty. One in five people in this age group lived on less than 60pc of median income in 2020, which was £476 per week. This means their weekly income was £286 or less.
Poverty cases have risen the fastest in the capital, where one quarter of all pensioners were found to be living on a low income. This London rate has grown nearly four-fold over nearly a decade, from 7pc in 2012.
The state pension is at the core of retirement plans. However the full rate is currently £179.60 a week, which is 38pc of the average household income in Britain. A two-person household relying on the full state pension would have income that is 75pc of the national average.
A household is deemed to be below the poverty line if its income is less than 60pc of the national median.
The state pension "triple lock", which guarantees pension increases each year, has been branded “worthless” as millions of pensioners have struggled to cope with rising living costs.
Household costs have risen faster for pensioners than for the working population over the past decade, according to the Office for National Statistics. Meanwhile, pensioners’ average total income has remained almost flat over the same period.
Poverty levels were highest among single retired women, with 27pc living beyond their means, compared with 23pc of single men, in 2020.
However, 700,000 retirees could be lifted out of financial hardship with the help of pension credit, according to estimates from Independent Age, the charity.
Up to £1.8bn failed to reach the poorest people in retirement despite them being eligible for pension credit. Fewer than 64pc of those who qualify have taken on the income benefit over the last 10 years, the charity said.
Deborah Alsina, of Independent Age, said the figures should come as a "huge red flag", as they indicated many were not receiving pension credit despite being eligible.
“For the last ten years, pensioner poverty has been creeping back up, and this ticking time bomb cannot be ignored. People have told us they have been forced to make impossible decisions, between buying fresh food or whether to heat their homes in the colder months,” she said.
The pensions minister Guy Opperman has come under pressure to take action. Stephen Timms, chairman of the Work and Pensions Select Committee, has written to the minister urging him to better publicise pension credit.
“For too long, too many people have missed out on this life-changing entitlement. I am calling on the Government to act now and produce a comprehensive action plan. Short term measures alone – such as one-off awareness raising activity – have failed to boost uptake rates,” Mr Timms said.
Pension credit is extra money designed to help with living costs for people who are over state pension age and on a low income. This includes an income top up for those whose weekly income has fallen below £177.10, as well as other forms of support, such as housing benefit, free TV licences, council tax support and free eye tests.
This can amount to £7,000 per person every year.
The Government’s failure to deliver pension credit to more than a million people entitled has cost the health and social care systems £4bn per year, Independent Age estimated in September 2020 based on research it commissioned from Loughborough University. Only one in six of those who should receive it have claimed.
The huge bill footed by taxpayers has been significantly higher than the annual cost of giving pensioners the £2.2bn in pension credit that they are entitled to.
The proportion of pensioners living in “material deprivation”, where they can’t access a given good or service because of cost or health has dropped to 6pc.
