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Poverty and financial disadvantage

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 and money has to be saved for bills. There is no room for luxuries.

The harsh reality of low income in later life

While the number of pensioners living in poverty has fallen over the last decade or so, there are still 1.6 million pensioners living in poverty.

Key stats:

  • 1 in 7 pensioners (1.6 million or 14% of pensioners in the UK) live in poverty, defined as having incomes of less than 60% of median income after housing costs.
  • A further 1.2 million pensioners have incomes just above the poverty line (more than 60% but less than 70% of median income).
  • Low income in retirement is often linked to earlier low pay, or time out of employment, e.g. due to caring responsibilities, disability or unemployment.
  • Women are more likely to be in poverty than men, and older pensioners (especially those aged 85+), single people living alone, private tenants and Asian pensioners are at particular risk.

The numbers of people living on low income has fallen substantially since the mid-1990s but progress has stalled and numbers have been unchanged in recent years.

Older people are missing out on entitlements

Given these levels of poverty, it is of great concern that many older people are missing out on entitlements. The Government estimates that in 2014-15, £3.5 billion of low income benefits (Pension Credit and Housing Benefit) went unclaimed by older people.

This is likely to be due to a combination of reasons including: lack of knowledge about the complicated systems, an assumption they will not be entitled, negative attitudes to claiming, or because people are put off by the processes.

What's it like to live on a low income?

It's important to look at the people behind the statistics. Age UK’s report, Living on a low income in later life (2012), provides an in-depth exploration of what it's like to live on a low income.

How we can end pensioner poverty

By 2020, Age UK wants to see pensioner poverty halved and everyone actually receiving any support that is due on the basis of their income.

State and private pension systems need to ensure current and future pensioners are able to avoid poverty in later life. In the meantime, benefit take-up must be increased through: on-going publicity, changes to administration and looking at ways of placing less onus on the individual to navigate a complicated system of benefits.

End pensioner poverty report

Our End pensioner poverty campaign aims to raise awareness of the problem of poverty for older people in the UK and calls on local and national Government to take action. Download the 2014 campaign report.

How Age UK helps older people on a low income

Age UK helps to improve people’s income and quality of life through our free information and advice. Read more about how we provide advice.

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