The annual poverty figures came out earlier this month covering the last year of the Labour government – 2009-10. For those who love figures, Households Below Average Income is a must-read – over 250 pages with some 150 detailed tables.
Within this mass of numbers are the key headline poverty rates. For older people there is no change in the most commonly used measure. This defines poverty as income of less than 60% of median (typical) household income after housing costs. On this basis shockingly there are still 1.8 million (16%) of pensioners living in poverty. Levels are even higher when measured before housing costs although at least these showed a fall from 2.3 million to 2.1 million since the previous year.
The poverty figures are however considerably lower than when Labour came into power in 1997. At that time 2.9 million pensioners were in poverty (after housings costs). There was rapid progress in the early years of the 21st century with poverty rates falling by over 1 million by 2005-06. This was at least partly due to the introduction of pension credit and other more generous benefits for older people. And while a minimum level of income is essential it is not the only factor that contributes to standard of living.
This year the report includes a useful new measure of material deprivation for pensioners. Material deprivation is measured by asking people if they have particular items, or can do certain things, that most people consider essential. For example this includes having a damp-free home or being able to replace a cooker if it broke down. If people answer no then the reasons why are explored. Under this measure 9% of people aged 65+ are in material deprivation. Interestingly there is little overlap between income poverty and material deprivation among pensioners, suggesting these are somewhat different but complementary measures of disadvantage and exclusion.
So the Government has the tools to measure progress. It also made a good start when it came to power by announcing the restoration of the link between increases to the state basic pension and average earnings through the triple guarantee. But this will take time to have an impact and for some, gains will be outweighed by other changes such as a lower level of winter fuel payments and a change to the index used to uprate the state additional pension and some other benefits. The Coalition Government has a radical reform agenda including proposals for state pension reform for future pensioners. We are still waiting for a plan to show how poverty among current older people is going to be reduced and abolished.