- Temporary cost-of-living support factored into official figures suggests pensioner poverty improved in the UK, from 18% of all pensioners in relative poverty to 16%.
- However, national charity Independent Age says these figures do not paint the real picture, and long-term solutions are desperately needed.
According to the latest Households Below Average Income (HBAI)1 figures from the Department for Work and Pensions (DWP), there were 1.9 million older people living in poverty in 2022/23, which on the surface is a decrease on the previous 2.1 million estimate from 2021/22.
However, when stating older people’s level of income, the analysis by the DWP included the temporary cost-of-living financial support that was provided. While these payments were welcome, they were short term, and have now stopped. Without this short-term support, the figure would have actually been much higher, with around 2.2 million older people in relative poverty after housing costs in 2022/23.
Additionally, the DWP acknowledge that some of the HBAI data collected during Covid-19 was impacted by the pandemic so the strongest comparison for 2022/23 data is with the 2019/20 data. This means that without the short term cost-of-living support, relative poverty in later life would have actually remained flat at 18% of all pensioners in relative poverty, and not the 16% currently being reported.
The charity is issuing a warning to the next UK Government that these official figures should not be taken as a sign of improvement. There is still an urgent need for long-term solutions to tackle poverty in later life.
Joanna Elson CBE, Chief Executive of Independent Age, said:
“These figures are a stark warning to the next UK Government that they must tackle the huge issue of poverty in later life and provide long-term financial security for everyone as they age.
“The cost-of-living support was a vital lifeline, but this temporary measure only just managed to keep many older people above water during an extremely turbulent period. This support has now stopped, yet costs are still extremely high and are stretching budgets to breaking point. Our helpline continues to receive regular calls from people in later life that are anxious about their financial situation. Many have had to make tough cutbacks such as only eating once a day or washing less to save on water. We have been hearing harrowing stories likes this for far too long.”
The cost-of-living support package was introduced by the UK Government to help people living in financial hardship during a period of high inflation. In England in 2022-23, older people living on a low income may have received up to £1,5002. This could have been made up of a number of payments including the means-tested Cost of Living Payment, the Pensioner Cost of Living Payment, Warm Home Discount Scheme, Council Tax Rebate, and the Energy Bills Support Scheme. People with a long-term condition or disability may also have received an additional payment of £150 if they were in receipt of a disability benefit, such as Attendance Allowance.
Worryingly even these payments were not enough to stop older people in poverty from making difficult decisions. In November 2022, at the height of the cost-of-living crisis, Independent Age polled older recipients of the first two cost of living payments. The findings were concerning, showing that a majority of respondents still struggled despite the extra money: 31% said the payments didn’t help at all and 23% said they were not very much help. Only 19% said the extra money helped a great deal3.
The charity says it is also clear from polling they commissioned in April 2024 that support is still needed, as high costs continue to be a major concern for many people in later life with 45% of those aged 65+ thinking the cost of living situation will get worse in the next six months4. Alarmingly, the polling also indicates that there will be more financial instability ahead for many people aged 65+ with 30% who have already made cuts expecting to make further cutbacks on usual spending.
Joanna Elson CBE, Chief Executive of Independent Age, continued:
“Without long-term solutions, the future is uncertain and bleak for many older people on a low income. Our latest research found that if current trends continue, pensioner poverty could increase from 2.1 million in 2022 to 3.9 million in 20405.
“It’s time for all political parties to come together and ensure that everyone receives the money they are currently entitled to, that long term solutions are put into action such as reform of the private rented sector and the establishment of national social tariffs to help with household bills. We also want to see the next UK Government establish what level of income is needed to avoid financial hardship in later life and ensure everyone is able to reach it, including those who are wholly reliant on the State Pension. A future without pensioner poverty is possible, but drastic change is needed.”
Recommendations
Earlier this year, Independent Age launched its Two Million Too Many campaign to establish a consensus across political parties in Westminster on how to best tackle poverty in later life.
The charity wants the next UK government to make sure all older people:
- Access existing support by increasing awareness and uptake of entitlements such as Pension Credit, Attendance Allowance, Housing Benefit and social tariffs
- Have long-term financial security by reducing unaffordable household costs, establishing an adequate minimum income in later life and ensuring our housing system is fair, good-quality and affordable
- Are given a voice at the heart of government, by creating a Commissioner for Older People and Ageing in both England and Scotland.
Yvonne Bailey, 79, from Oxfordshire was a recipient of the cost-of-living payments. She said:
“The cost-of-living payments were a welcome help during a very difficult time. Thankfully I was eligible for the extra money as I receive Pension Credit. But it still wasn’t enough to cover all my bills. Every time I went to the supermarket I noticed items had gone up in price and my energy bills kept on rising. I still had to cut back on food and heating, even when the weather was freezing.
“Now the payments have ended but my food shop and bills are still very expensive. The news might say inflation has gone down, but I am still struggling and the extra support has been taken away. I do worry about the future.”