Rising State Pension age sees thousands pushed into poverty

The rise in State Pension age has affected approximately 700,000 65-year-olds, and while some people have been able to continue working or have enough private pension savings to cover their needs, more than 160,000 people are facing income poverty, with some groups harder hit than others. The following have felt the loss more than others:

Single people – income poverty rose to 38%, 22 percentage points higher than the 16% it would have been without State Pension age reformsThose with lower levels of formal education – income poverty rose to 35%, 21 percentage points higher than the 14% without the reformsRenters – This group saw the biggest rise to 46%, 24 percentage points higher than the 22% it would have been.

While these numbers are cause for concern in themselves, there are growing fears that these numbers will rise further with the next rise in State Pension age. Emily Andrews, Deputy Director for Work at the Centre for Ageing Better, said:

“These statistics are shocking and show that the number of 65-year-olds in absolute poverty rose from one in ten before the state pension age increased to almost one in four just two years later. The severity of this situation means it is crucial the government gets serious on improving access to work for people in their 60s: investing in tailored employment support for those out of work, expanding access to occupational health support, and bringing flexible work and carers leave proposals into legislation.

“But even if the government can deliver all this, for those who are unable to access work, the raising of the State Pension age will leave them poorer – and in many cases, actually impoverished.”

Andrews highlights that while it may seem that the obvious solution is for people to simply work for longer, the research shows that people are much less likely to be working as they reach their mid-60s. Jonathan Cribb, Associate Director at IFS, said: “People in their mid-60s are less likely to be in employment and therefore more dependent on the State Pension for income than those in their early 60s. A key takeaway for policymakers is to ensure the working-age benefits system appropriately supports those approaching the State Pension age, with this being increasingly important as the State Pension age increases further.’

Currently, however, legislation is not yet in place to support people in this way, leaving the onus on the general public to create their own financial buffer.

Author: wpadmin

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