While many of us might think pensioners are doing alright, it seems that’s not the case for everyone. A new report by the Institute for Fiscal Studies (IFS) has revealed that the poorest pensioners are struggling more than ever.
The IFS report has shown that the average income of the poorest pensioners has only risen by 5% since 2011, while the average income of all pensioners has risen by 12% and the average working population has seen a 13% increase. This means that the gap between the wealthiest and poorest pensioners is getting wider.
The Pension Credit Catch-22
Part of the reason for this is that the poorest pensioners are missing out on benefits like pension credit. Pension credit is a means-tested benefit that tops up your weekly income if you are over 66 and your income is below a certain level. It can be worth a few hundred pounds a month, and also opens the door to help with bills like heating and council tax.
However, many people don’t claim it. The IFS says the low take-up of pension credit is a problem across the benefits system, and more should be done to educate and inform people about what they can receive.
The Reality of Poverty
The IFS report also revealed that the number of pensioners living in poverty has risen. The proportion of pensioners who can’t afford key items like clothes or food has risen from 6% to 8% since 2019, and the number who can’t afford to heat their homes has risen from 2% to 5%.
What Can Be Done?
There are a few things that can be done to help struggling pensioners.
- Increase the take-up of pension credit. This can be achieved by making it easier to claim and by raising awareness of the benefit.
- Introduce a social tariff for energy. This would help to lower energy bills for pensioners on low incomes.
- Make sure the triple lock is maintained. The triple lock guarantees that the state pension increases by the highest of inflation, average earnings, or 2.5%. This is a vital protection for pensioners.
A Bleak Picture
The IFS report paints a bleak picture of the financial struggles facing many pensioners. It is important to remember that many older people are living on very low incomes and have to limit themselves to just one meal a day, wash less to save on water and even avoid socialising as they cannot afford to buy a simple cup of coffee.
The new government needs to take action to help the poorest pensioners. They should focus on increasing the take-up of pension credit and introducing measures to make energy more affordable. Without action, the gap between the wealthiest and poorest pensioners will continue to grow.