Britain’s biggest pensioner
organisation – the National Pensioners Convention (NPC) – is using
the anniversary of introduction of the first ever state pension to call on the
government to eradicate today’s growing pensioner poverty.
One hundred years ago today (January 1st), the first ‘pensioners’
collected their state pension at the post office. It was set at 5 shillings
a week and paid to men and women on reaching 70 years of age.
Even though the pension was means-tested, it was clearly a tremendous
advance in social policy and the first time that the state had recognised it
had a responsibility to look after those in old age.
But today, figures show that after a century of the
state pension, pensioner poverty remains:
· In the last year
(2007/8) the number of pensioners living below the official poverty line of
£151 a week (60% of median population income before housing costs) has
risen by 300,000 to 2.5m. This is the number of older people living in poverty
as in 1997/98.· Between 1997
and 2006, the number of people living in severe poverty – defined as
living on less than 40% of median population income – increased by 600,000.
The poorest quarter of pensioner households saw their incomes rise by less
than 1% last year, well below inflation. The poorest single pensioners saw
their real incomes drop by 4%.· About two thirds
of those pensioners living in poverty are women. Up to as many as 5m do not
qualify for a full state pension because they were unable to pay the full
national insurance contributions because of caring for their families or being
in low paid employment.· Around 62% of
pensioner couples have an annual income of £15,000 or less, and 45%
of all single pensioners have an annual income of £10,000 or less.· In a recent EU
survey, only pensioners in Latvia, Spain and Cyprus are more likely to fall
into poverty than those in the UK. The Institute for Fiscal Studies concludes
that the proportion of pensioners below the poverty threshold will remain
at its current level for at least the next decade, despite government reforms.· A recent survey
by Scottish Widows found that 1 in 3 future pensioners will not have sufficient
income to avoid poverty when they retire. Up to 9m workers currently have
no other pension provision than that which will be provided by the state when
they retire, and even those who are currently in a money-purchase (defined
contribution) occupational pension scheme have seen the value of their pension
funds fall by an estimated £250bn.
Joe Harris, NPC general
secretary said: "We owe the original pension pioneers a great debt of gratitude
for securing the very first state pension, but they would be turning in their
graves if they knew that after 100 years, 1 in 4 pensioners was still living
in poverty. In fact, today’s state pension is worth even less in relation to
average wages than it was in 1908 and next year’s increase in the state
pension will be a measly £4.55 a week, at a time when millions of older
people will be faced with the unenviable dilemma of trying to heat their homes
or eat properly.”
“For decades, the
policy of successive governments has been to rely on means-tested benefits for
existing pensioners and good occupational pension schemes for future generations,
as a way of avoiding paying a decent state pension. But this approach is unravelling
– with means-testing remaining unpopular and ineffective at getting money
to the poorest and many decent company pensions being replaced by insecure money-purchase
schemes. Billions of pounds have been wiped off private pension funds in recent
weeks – and up to 9m workers now face an insecure retirement.”
“Pensioners –
both now and in the future – need dignity and security in retirement that
only a decent state pension can provide. The government should use the huge
surplus in the National Insurance Fund to raise the state pension to at least
£151 a week to give everyone a pension that takes them out of poverty.
After 100 years it’s about time we ended pensioner poverty for good.”
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