100 years after first state pension – and 2.5m older people still live in poverty. That is the headline in the latest issue of the Mature Times.    If you are unfamiliar with the Mature Times,  it is well worth a read.  For example there is a Guide To Retirement available on the website.

The figures it quotes on pensioner poverty are most distressing.

In 2007/8 the number of pensioners living below the official poverty line of £151 a week (60% of median population income before housing costs) rose by 300,000 to 2.5m.

Between 1997 and 2006, the number of people living in severe poverty – defined as living on less than 40% of median population income – increased by 600,000. The poorest quarter of pensioner households saw their incomes rise by less than 1% last year, well below inflation. The poorest single pensioners saw their real incomes drop by 4%.

About two thirds of those pensioners living in poverty are women.

Joe Harris, National Pensioners Convention general secretary is quoted as follow:

We owe the original pension pioneers a great debt of gratitude, but they would be turning in their graves if they knew that after 100 years, 1 in 4 pensioners
was still living in poverty. In fact, today’s state pension is worth even less in relation to average wages than it was in 1908, and next year’s increase in the state pension will be a measly £4.55 a week – at a time when millions of older people will be faced with the unenviable dilemma of trying to heat their homes or eat properly.

The National Pensioners Convention (NPC) and over 15 individual trade unions in October 2008 joined together to call for a higher basic state pension for the over 60s of today and tomorrow.

They stressed that a decent state pension is an issue not just for today’s pensioners, but for future generations as well. This point has taken on extra significance given the recent financial crisis and the weakness of private pensions which have recently lost £250bn in value – adversely affecting up to 5m people who are about to retire.

For decades, the policy of successive governments has been to rely on means-tested benefits for existing pensioners and good occupational pension schemes for future generations, as a way of avoiding paying a decent state pension. But this approach is unravelling: means-testing remains unpopular and ineffective at getting money to the poorest, and many decent company pensions are being replaced by insecure money-purchase schemes. Billions of pounds have been wiped off private pension funds in recent weeks – and up to nine million workers now face an insecure retirement.

Unfortunately the UK Labour government seems unwilling to address this issue. The opposition has been more vocal.

Jenny Willott, Liberal Democrat Shadow Work and Pensions Secretary, spoke out on Pensioner Poverty during a Parliamentary debate on 4th June. She attacked the Government’s treatment of pensioners. Ms Willott called for the immediate restoration of the link between pensions and earnings.

The Conservatives proclaimed that Pensioners are to lose nearly £100.

Within the EU only pensioners in Cyprus, Spain and Latvia are more likely to fall into poverty than in the UK. By official measures there are now some 2.5 million pensioners in the UK living in poverty.

Labour’s increased use of complex means testing of pensioners has resulted in reduced take-up of benefits. Between 1.2 and 1.8 million pensioners in the UK failed to take up their entitlement of pension credit last year. Up to 1.2 million of those were living in poverty.

This Government is tired, weak and hurting the most vulnerable people in the country with its incoherent and counter-productive policies.

Unfortunately pensioners in poverty do not have the powerful lobbyists that other sectors of the economy have. It is critical that we all speak up for them.

Technorati Tags: National Pensioners Convention, pension, Pensioner, Poverty threshold, UK