Pensioner poverty has fallen

Friday, 29 January 2010 20:44

Pensioner poverty has reduced since 1999, according to figures from the Office for National Statistics.

In 1998-9 there were 2.9 million, but the figures reduced to two million in 2007-8 – a reduction of almost a third.

The official definition of poverty is living on 60 per cent of the average income, after housing costs have been paid.

Despite the overall reduction in poverty, the ONS said that one million households of one person aged 60 or over were in fuel poverty in 2007. The definition of fuel poverty is where the household needs to spend at least 10 per cent of income on heating the home.

The age group of the over-60s is one of the worst affected by fuel poverty, according to the ONS. It has got worse too. The government’s own research has shown that general fuel poverty has increased since 2007.

Further figures from the ONS show that the distribution of incomes in the UK has become less equal in the past 30 years, for all households – working and retired. However, income equality reduces after retirement.

Pensioners as a whole have come to rely less on the state pension as money to live on. Back in 1977, the average income of retired households was made up of 53 per cent from the state pension, plus another 18 per cent from private or company pensions. By 2007-8, those two sources contributed almost equally to pensioners’ income, with 36 per cent from private and company pensions, and 37 per cent from the state pension.

The income from company and private pensions has become critical in determining whether people would be financially comfortable in retirement or not, according to the ONS.

"In 2007-08, pensioners with private pensions were more likely to be in the higher income quintile groups [the top 20 per cent] for the whole population, while those without private pensions were more likely to be in the bottom income quintile groups," the ONS said.

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