Author Archives: José Luis Iparraguirre

Older people are still living in poverty and with growing inequality in later life

Our first blog post of the week looks at the findings from Age UK’s latest Chief Economist report. It focuses on the key economic aspects in the lives of many older people in the UK: inequality and poverty, and benefit take-up. 

Almost 60 years ago, Peter Townsend studied the lives of older people in East London and wrote:

The object of national assistance is largely to make up income, on test of means, to a subsistence level… A general definition of need is incorporated in its scale rates, and these are applied to individual circumstances, with certain discretionary disregards and allowances. The sums are intended to cover food, fuel and light, clothing, and household sundries, beside rent, and sometimes, after investigation, small additions are made for laundry, domestic help, or special diet. This definition of ‘subsistence’, on such evidence as exists, appears to be completely unrealistic.

You would be forgiven if, after reading Age UK’s latest Chief Economist Report, you concluded that not much has changed over all those years. Because, though the material aspects of the lives of older people in the country, whether in East London or East Belfast, have undeniably improved since then – thanks in a great part to the way initially ploughed by Eleanor Rathbone MP and the Old People’s Welfare Committee, Age UK’s predecessor, the current state of poverty among older people still looks dismal and grim as much as what it was like in Bethnal Green in yesteryear. Continue reading

The more stringent the social care eligibility, the lower the quality of life of service users

After a comprehensive and meticulous review, we have recently published an academic paper that looks into efficiency in the provision of social care services for older people in England It is a difficult, technical piece; here we describe what we did and present the main results.

Efficiency denotes ‘doing more with less’ but sometimes is used as a euphemism for cuts.  This is not how we approached the issue. Rather, our yardstick was the quality of life of people receiving the services (that is, the users themselves). Higher quality of life equals higher efficiency. Simple.

Even if we focus on quality of life, we could think of efficiency in terms of either how to spend the least to generate a given level of quality of life or how to generate the most quality of life with the given bundle of resources available. We chose the latter approach. Focusing on spending the least would distract efforts away from people in need towards objectives expressed in expenditure items, sterling pounds, delivery contract clauses and the like. Instead, by focusing on making the most with what’s available we can learn about what may be behind that which matters to users of social care services and their families: their quality of life in relation with the care they get. Continue reading

Disability benefits do benefit people in poorer neighbourhoods’

We carried out a piece of research which studied whether the proportion of older residents in lower super output areas (LSOA) in England receiving disability living allowance and attendance allowance was statistically related to the degree of income poverty among older people in the area. (LSOAs are geographical areas with a mean population of 1,500 people; there are 32,482 LSOAs in England). The paper was peer-reviewed and was just published in the Journal of Maps (

We applied a number of spatial econometric techniques, given the geographical nature of the data. The data for beneficiaries come from the Department for Work and Pensions. Income poverty among older people is one of the indicators compiled by the Social Disadvantage Research Centre at the Department of Social Policy and Social Work at the University of Oxford. The estimates of total population by age are from the Office for National Statistics.

We found a greater concentration of DLA and AA recipients over state pension age living in deprived areas than in more affluent areas: nearly 30 per cent older beneficiaries live in the 20 per cent poorest of areas and approaching two thirds live in the poorest half of areas.

Even after accounting for significant spatial effects, we still found a strong, positive relationship between proportion of beneficiaries and proportion of older people in poverty .

These allowances are therefore benefiting more deprived communities.

The study does not allow us to affirm that the allowances are directly benefiting older people in lower income. However we can conclude that these benefits, although not means-tested, would be partially addressing the geographical inequalities in income of older people across England.

Reducing or eliminating these benefits would hit the harder the poorer the neighbourhood.

Last year, Age UK helped 500,000 people put £120million back in their pockets through free benefits information and advice. This year, we will continue to break down the barriers that prevent people from claiming, in particular older people not realising that they are eligible for some additional income. For more information, please visit

Find out more about our policy work on money-related issues

There may be even more trouble ahead – last week’s announcement of Subsidised Loans

Last Thursday, George Osborne, Chancellor of the Exchequer, and the Governor of the Bank of England, Mervyn King, jointly announced a new measure to stimulate economic growth. They also, importantly, did not rule out more quantitative easing.

Mr King prescribed a recipe of subsidised credit, estimated to be worth about £80bn –already known as ‘funding for lending‘. Technically, it consists of auctions by the Bank of England of loans totalling a minimum of £5bn a month for 6 months at a minimum rate of the Bank Rate plus 25 basis points (currently 0.75 per cent).

They feel this is required because the volume of loans to non-financial companies has been falling since the onset of the crisis: the chart below shows that less money has been loaned than the month before, almost every month, since February 2009.

Monthly changes

Continue reading