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Pensioners miss out on billions

Published on 25 July 2015 12:01 AM

Pensioners miss out on £billions despite number in poverty rising

New Age UK report shines a spotlight on poverty and inequality among pensioners

Tens of thousands of the very poorest pensioners missed out on an estimated £3.7 billion in Pension Credit and Housing Benefit in 2013/14, according to the latest Government figures analysed in Age UK's new Chief Economist's Report [1].

Published today (Saturday 25 July), the report gives an in-depth insight into key economic issues affecting older people in the UK.

It warns that despite formidable progress to reduce pensioner poverty in the decade following the introduction of the Pension Credit in 2003, the latest government figures indicate that pensioner poverty is creeping up once again: 13% of all pensioners were living below the poverty threshold in 2012/13 but this increased to 14% in 2013/142 [2].

Today the total number of pensioners living in poverty sits at the 1.6 million mark, with around 900,000 of those living in severe poverty [3]. This entrenched problem is partly explained by the huge numbers of pensioners who don't claim the benefits to which they are entitled, with around £3.7 billion in benefits designed specifically to help low-income pensioners going unclaimed each year.

In fact the latest official figures show that around 1.3 million people entitled to Pension Credit - which tops up the income of the poorest pensioners - did not take up this vital benefit in 2013/14, missing out on an estimated £2.86 billion in total - or an average of around £2,132 per person per year. In addition around 260,000 pensioners missed out on Housing Benefit during the same period, sacrificing £820 million in total or £3,224 each a year4.

The Charity is warning that tens of thousands of pensioners are struggling to afford the basics every day and is once again calling on the government to develop and implement a national strategy to tackle the scandal of pensioner poverty across the UK.

As well as facing a daily challenge to pay for essentials such as food, clothing and energy, around 2.7 million older people are stuck at home and unable to go on a social outing even just once a month, whilst 1.2 million pensioners could not replace their cooker if it broke down [5].

Age UK's analysis also shows worrying signs that inequality among older people is increasing again due to the incomes of poorer pensioners falling faster than those in the top or middle income groups. In real terms, between 2010/11 to 2012/13 incomes of the richest 10% of pensioners dropped 3.8% from £833.95 to £803.00 whereas those in the poorest 10% saw a drop of £165.26 to £156.00 - a 6% fall over the same period6.

In response to the report, Caroline Abrahams, Charity Director for Age UK, said: 'This report shows that the older population is increasingly diverse and characterised by stubbornly persistent levels of poverty.

'The fact that there is appreciably less pensioner poverty than a generation ago is an achievement we should all be proud of but it's important to remember that there are still 1.6 million very poor older people struggling to make ends meet, with many more apparently heading the same way.

'Worryingly, the poorest pensioners are losing ground the fastest, leading to a widening gap between 'the haves and the have-nots' among those in retirement.

'We urgently need a concerted effort to help the most vulnerable. Better access to good quality information and advice, and increased take-up of pensioner benefits would be a good start. A national strategy with firm targets and workable solutions is also long overdue.

Ultimately we want to see pensioner poverty halved by 2020 but in the meantime, ensuring that the poorest pensioners receive all the help to which they are entitled would make a huge difference to many lives.'

Professor Jose Iparraguirre, Age UK's Chief Economist and author of the report, said: 'Most commentators opined that the Summer 2015 Budget left older people untouched.

'Yet in view of the unacceptable levels of material deprivation and the alarming number of poor pensioners missing out on the benefits they are entitled to, ‘no news' in this case seems to be ‘bad news'. This report shows there is a lot to do on behalf of those who are most in need.'

> Chief Economist's Report

-Ends-

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Notes to editors

1. Income-Related Benefits: Estimates of Take-up 2013/14, published by the Department for Work and Pensions (DWP), June 2015

2. Household Below Average Income figures 2013/14, published by DWP, June 2015

3. Households Below Average Income 2013/14, Chapter 6, published by DWP, June 2015

4. Income-Related Benefits: Estimates of Take-up 2013/14, published by DWP, June 2015

5. Family Resources Survey 2013/14, published by DWP, June 2015

6. Family Resources Survey 2013/14, published by DWP, June 2015

For media enquiries relating to Wales, Scotland and Northern Ireland please contact the appropriate national office: Age Scotland on 0131 668 8055, Age Cymru on 029 2043 1562 and Age NI on 028 9024 5729.

Age UK

We work with our national partners, Age Scotland, Age Cymru and Age NI and our local Age UK partners in England (together the Age UK Family). We also work internationally for people in later life as a member of the DEC and with our sister charity Help Age International.

Age UK believes that everyone should have the opportunity to make the most of later life, whatever their circumstances. We provide free information, advice and support to over six million people; commercial products and services to over one million customers; and research and campaign on the issues that matter to people in later life. Our work focuses on five key areas: money matters, health and well being, home and care, work and training and leisure and lifestyle.

Age UK is a charitable company limited by guarantee and registered in England (registered charity number 1128267 and company number 6825798). Age Concern England and Help the Aged (both registered charities), and their trading and other associated companies merged on the 1st April 2009. Together they have formed the Age UK Group ("we"). Charitable services are offered through Age UK and commercial products are offered by the Charity's trading companies, which donate their net profits to Age UK (the Charity).

Helen Spinney
Senior Media Officer, Age UK
t. 020 3033 1430
e. Helen.Spinney@ageuk.org.uk

www.ageuk.org.uk | www.ageukblog.org.uk

Follow Age UK's news and PR team on Twitter at @AgeUKnews

Last updated: Oct 06 2017

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