Pensions 

More pensioners face 'heat or eat' decision

More pensioners face 'heat or eat' decision

One in six pensioners in the UK currently live in poverty, with the number possibly increasing in the future due to housing and pension savings trends, the Joseph Rowntree Foundation (JRF) has warned.

In its 54-page report UK Poverty 2018, the social policy research and development charity argued the current situation is a “considerable improvement” when compared with two decades ago when nearly one in three lived in poverty.

The proportion of pensioners living in poverty more than halved, falling to 13 per cent in 2012 to 2013, but it recently increased again, to 16 per cent in 2015 to 2016 and staying at that level in 2016 to 2017.

The Joseph Rowntree Foundation's report showed the recent increase in pensioner poverty has been primarily driven by the growing number of pensioners who rent rather than own their own home.

Poverty among pensioners in the private rented sector is now 36 per cent (up from 27 per cent in 2007 to 2008).

For social renters, poverty has increased from 20 per cent to 31 per cent since 2012 to 2013.

Since 2010 to 2011, eligible rent – the amount that housing benefit covers – has been falling behind actual rents paid by low-income pensioners.

Poverty rates among pensioners who own their own home are low and have changed very little over the last decade, the Joseph Rowntree Foundation reported.

Last year, the charity warned half a million more people would live in poverty if the government maintained its benefits freeze.

Of the 330,000 additional pensioners in poverty since 2012 to 2013, 60,000 are private renters and 130,000 are social renters.

According to the report, this trend looks set to continue as more working-age people are locked out from buying their own home than in previous generations, and housing costs are higher for renters.

For the poorest pensioners in the UK, the weekly cost for those paying off a mortgage was £50 in 2016 to 2017, £81 for those privately renting and £90 for those in social rented homes.

Joseph Rowntree Foundation's research also showed that over the last two decades there has been a big increase in the proportion of people retiring with a private pension, and in the amount of income that successive cohorts of pensioners receive from occupational schemes.

However, this has not been the case to the same degree among those on low incomes, the charity's research revealed.

Most of the benefits of the coverage of private pensions "has gone to better-off pensioner families" who already had another adult receiving income from a private pension, the report stated.

Campbell Robb, chief executive of the Joseph Rowntree Foundation, said many of the current generation of pensioners have benefited from a golden age – rising home ownership, well-paid work and healthy pensions, alongside stable, affordable tenancies in social rented homes.

He said: "However, this report clearly shows that for people approaching retirement and people toiling in middle age to build a decent and secure life, their prospects look less certain thanks to broken housing and labour markets, which are locking more working families into poverty.