Wealth and income inequalities among older people
It is great to see the publication today of two new reports from CARDI which detail two distinct but interlinked issues – wealth and income inequality among older people on the island of Ireland. Both publications will provide a valuable evidence base to support the development of future government policy in a complex area. Evidence demonstrates that income hardship is linked to a variety of issues including poor health, social exclusion and isolation emphasizing the importance of this data.
The story these reports tell is one that Age NI has been highlighting for a number of years. Older people are a hugely diverse population, not least in terms of wealth and income. The fact that people here, over the age of 50, hold 65% of personal wealth should come as no surprise as we know that wealth and assets accumulate over the life course. When talking to people in later life, they will tell you about the clear messages they received when growing up, messages that promoted financial responsibility - building up a savings pot, the importance of contributing to a pension and not accruing debt. In many ways, today’s report demonstrates the impact of those messages for a section of our older population – a significant asset base, mostly accumulated through owning housing stock, and financial assets such as pensions and savings.
However, the report on wealth also highlights that while those aged over 50 hold significant assets, those between the ages of 25 and 49 have a weekly disposable income approximately 43% more than those over 50, evidencing the reality of older people being ‘asset-rich and income-poor’.
The second report, focused on socio-economic inequalities among older people, tells an equally important story which is that there is a wide gap between the total incomes of the richest and poorest older people here in Northern Ireland, £572 per week at present, and that gap is increasing. Earnings from work account for a significant amount of the differences in income, with the richest pensioners earning between 36 to 44 times more than the poorest pensioners from this income source, indicating the importance of employment and skills for people over the age of 50.
A number of thoughts strike me in light of the evidence contained in today’s reports. First and foremost is that at a time when much public debate appears to pitch older people against younger people, it is probably more meaningful and more effective to focus on addressing the inequalities which exist among older people. We can do this in a number of ways. Firstly, the debate about state pension reform cannot exclusively focus on future pensioners. We must also focus on delivering for people who are already receiving their pensions today. The data indicates that in Northern Ireland, 21% of pensioner couples and 39% of single pensioners have no additional income on top of state benefits. We must also consider how best to provide options for people who wish to unlock the capital in their assets to improve their income in later life.
Data available in the Republic of Ireland has indicated that much of older people’s wealth is transferred to younger generations. TILDA estimates that 24% of older households have given gifts of €5,000 or more to their children. The CARDI reports demonstrate that we lack this data in Northern Ireland, something that needs to be addressed so that we can fully understand the complexities of this matter.
Finally, the data contained in the report demonstrates the importance of lifecycle approaches to addressing the disadvantages we see so clearly among older people today. Addressing challenges experienced by younger people such as discrimination, unemployment and skillset development, as well as child poverty, should reduce the inequalities experienced by those individuals as they grow older, something which is in all of our interests.
While there are no surprises from the data launched today, these reports will have implications for government policies in years to come. We need to utilise the information available to use now to ensure that those policies are fit for purpose.