Almost half (41%) of people aged 50 and over who are not yet fully retired are concerned about living in economic hardship after they stop working, according to new research by the older people’s financial hardship charity Independent Age1.
According to latest figures, 18% of people aged 60-64 are living in deep poverty2. If governments across the nations do not take action, there is significant danger of a pensioner poverty surge over the next few years, warns the charity. The warning comes at a time when poverty in later life is at its highest level since 2007/8, with 2.1 million older people already living in poverty.
The new UK wide polling of over 2,000 people aged 50 and over highlights a severe lack of confidence among those approaching retirement about their financial situation in later life. The biggest concern of those not fully retired was having less disposable income, with 56% highlighting this as a worry. An overwhelming majority (80%) of those over 50 also thought the weekly rate of the full new State Pension, currently £203.85, would not be enough money to cover their essential costs.
Retirement might not even be an option for many approaching later life. Among those polled who are not yet fully retired and who do not plan on fully retiring, 39% said this is because they cannot afford to stop working. Housing costs were another issue, of those polled who are not yet fully retired and renting, a staggering 67% said they were not confident that their retirement income would cover their rent.
The research also revealed a worrying trend, with people conveying a widespread lack of understanding about their finances post-retirement. 48% of respondents said they didn’t have much knowledge of what financial options would be available to them once retired, while 16% knew nothing at all. When asked about their general financial situation after retirement, 45% said they didn’t know very much and 11% said they knew nothing at all.
Joanna Elson CBE, Chief Executive of Independent Age, said:
“There are far too many older people living in financial hardship, and alarmingly, this new polling indicates that there will be a tidal wave of pensioner poverty without governments across the UK intervening. Nobody should have to experience poverty, it is a tough and isolating way to live, but tragically, it has become commonplace throughout the UK.
“Governments across the UK must take notice of the warning signs. There are already 2.1 million older people living in poverty and a further million teetering on the edge. Now we have more evidence that many people approaching retirement are struggling financially and could soon be living in poverty. More needs to be done to ensure everyone receives the financial support they are entitled to so that no one experiences financial insecurity in older age.
“It’s essential to improve the lives of older people already living in financial hardship and instil confidence in those approaching retirement. Nobody should be left behind in later life, financially insecure and struggling to get by. Everyone deserves the opportunity to live well as they get older.
Recommendations
Independent Age is calling for policy changes that will help alleviate later life poverty in both the short and long term. These include:
- Governments across the nations should increase uptake of social security payments including Pension Credit which currently has an uptake rate of only 63% across Great Britain.
- The UK Government should pass the Renters Reform Bill to protect older people in the rental market.
- National and local government, and utility companies should proactively promote social tariffs that reduce costs of essential utilities including water, broadband and energy.
- The UK Government should support a pilot exercise to test an auto-appointment system for the Pension Wise guidance service.
- The UK Government should create an independent Commissioner for older people to raise awareness of the issues impacting those in later life.
- The UK Government should initiate a cross-party review to agree what level of income is needed in older age.
Rob, 67, from Cornwall, still works as a taxi driver. He says he has to work as he cannot afford to live on just his State Pension:
“I’ve had my State Pension for just under a year, but I wouldn’t be able to survive on it alone. I have to work. The rent here is £675 per month, the council tax is £104 per month, and the water is paid for, but I have to pay for the electric. I’m frugal – I’ll do a batch of cooking and keep the lights off – and when it’s cold I rarely turn on the heating. It’s just a tiny flat with electric storage heaters. I only signed a six-month contract; it will be on a monthly basis after that.
“I’m trying to save money. I’m going vegetarian, I don’t drink, but I run a car and have to get dental work done, so any money I accumulate just goes. I never looked at prices before but now I do because I’ve only got a certain amount of disposable income, and I still have debts to pay off.”
Pension Credit
There is financial support available to older people living on a low income. Pension Credit is an entitlement that tops up income to a minimum level, it also opens the door to other benefits including Council Tax reduction, Cold Weather Payments and money towards optical and dental treatment. However, Pension Credit has had a stubbornly low uptake for years. The latest figures for Great Britain showed that only 63% of eligible people were receiving the entitlement, meaning a massive 880,000 could be missing out.
Independent Age is calling on the UK Government to urgently introduce a Pension Credit uptake strategy. This should include details on targeted plans that gets money directly into the pockets of those that need support. Previous research by Independent Age showed that increasing uptake could lift more than 400,000 older people out of income poverty and halve severe income poverty to 4%.
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Notes to editor
1.All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,224 adults. Fieldwork was undertaken between 1st - 7th December 2023. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 50+).
2. Deep poverty is when someone lives in a household with an income below 50% of median income after housing costs. Source: Households Below Average Income, 2021/22, DWP, accessed via Stat Xplore.
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