Living on a low income in later life

An older couple managing their finances

Living on a low income in later life is very hard work. Every penny has to be watched. Shopping lists have to be kept to. Money has to be saved for bills. There is no room for luxuries.

Age UK has launched a report 'Living on a low income in later life' to examine this important issue:

opens link in new window Download 'Living on a low income in later life' (report overview) (PDF, 660kb)

opens link in new window Download 'Living on a low income in later life' (full report) (PDF, 2MB)

Managing on a low income - video

In the following video, 4 people in later life talk about how they manage their money:

View a transcript of this video

Older people's incomes are stretched to the limit

Many pensioners cope because of their extreme resourcefulness and determination not to get into debt – something they are proud of. They prioritise paying their household bills, shop around for good deals when they can, and go without things that many people would take for granted, such as replacing broken household goods or holidays.

But with their income being stretched by rising costs, many pensioners fear running out of options for juggling their budgets:

  • Many are anxious about the cost of care they need now or may need in the near future
  • The rising prices for fuel and food are also a huge source of anxiety
  • Benefits such as Pension Credit can make an important difference, but many people do not claim because they are not aware they are entitled, are put off by the process or are reluctant to ask for help
  • A Winter Fuel Payment which makes a significant contribution to their bills is essential to protect their health and well being, just as the continuation of the free bus travel and bus services to use it on helps some to shop around or visit family and friends

If older people's already overstretched incomes take any further hits, thousands more will be plunged into poverty.

The harsh reality of low income in later life

  • 1 in 6 pensioners (1.8 million or 16% of pensioners in the UK) live in poverty, defined as 60% of median income after housing costs
  • Pensioners are also the biggest group of people on the brink of poverty with 1.2 million on the edge
  • Low income in retirement is often linked to earlier low pay, or time out of employment - for example, due to caring responsibilities, disability or unemployment
  • Women, those age 80 to 84, single people living alone, private tenants, and Pakistani and Bangladeshi people are at greater risk of pensioner poverty
  • The numbers of people living on low income fell between 1997/98 and 2004/5; since then there has been little improvement

Current government policy to tackle low income in later life

  • The Government has introduced the 'triple lock guarantee' so that basic state pension is uprated by whichever is higher - earnings, prices, or 2.5%
  • Benefits such as Pension Credit are available for those older people on a low income who make a claim for their entitlements
  • Key areas of support have been protected, including free eye tests, free prescriptions, bus passes and TV licenses for the over-75s
  • Winter fuel payments are available for all pensioners
  • Cold weather payments have been permanently increased to £25 a week

opens link in new window Download 'Living on a low income in later life' (report overview) (PDF, 660kb)

opens link in new window Download 'Living on a low income in later life' (full report) (PDF, 2MB)

Your Age UK

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Age UK Advice:
0800 169 6565

Useful website

  • HM Revenue & Customs help ensure that the money is available to fund the UK's public services. They also provide targeted financial support to families and individuals. Visit their ‘Contact us’ section to enquire about taxable income.

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