Author Archives: Sally West

The Budget 2012

Posted on March 23, 2012 | 2 Comments

At the start of this week I told colleagues at Age UK that year’s Budget was unlikely to have much specifically for older people – either good or bad. But I was wrong! Headlines the next day included phrases such as ‘pensioners robbed’ and ‘anger as pensioners suffer’.

Disingenuously changes to allowances for people aged 65 and over were not described as a tax increases but ‘simplification’. So what is the effect? Well freezing the age allowances and abolishing them for those reaching 65 from April 2013 will result in 4.4 million people losing an average of £83 in real terms in 2013-14, of whom 360,000 will lose £285. 

These changes do not affect the poorest – over half of older people have incomes too low to pay income tax. But nor do they impact on the most wealthy older people who do not receive the higher allowances. Those affected will be older people who have built up private pensions and savings but still have only modest incomes. They will have a particular effect on people reaching 65 soon after April 2013 who may be planning their finances on the basis of a higher tax allowance and have little time to make changes.  Despite all you may hear about those reaching retirement now being the lucky generation with great final salary pensions, the median (typical) income of a newly retired pensioner is in the region of £11,000. 

As George Osborne points out, older people will gain from a £5.30 increase in the basic state pension and Age UK supports changes to the uprating of the basic state pension.  But many older people on modest incomes have other concerns – for example high energy bills, low rates of savings interest and reduced access to services.

Following the waves of protests about these changes to age allowances some commentators have argued that this balances things up a bit as in general pensioners have been protected from cuts, but at Age UK we worry about pitting one generation against another. In many respects there is more inequality within age groups than between them. Each generation faces different challenges and we need systems that are fair within and across age groups. And reductions in support or increase in taxes need to be debated – not announced without full consultation and described as simplification.  

Read Age UK’s full Budget briefing

Find out what the Budget means for you

 

→ 2 Comments

Posted in General

Tagged , , , , , , ,

Living on a low income is hard work

Posted on January 24, 2012 | 3 Comments

Retirement should be a time when we can take things easy and enjoy life – and for some it is. But for too many people with low incomes just getting by takes a great deal of effort.

A new Age UK report, “Living on a Low Income in Later Life”, based on interviews and discussion groups with low income older people, paints a picture of lives that revolve around budgeting to make every penny count and keeping meticulous records of spending. A shopping trip isn’t just a quick dash to the nearest shop. It can be a carefully planned mission – going to one place where the teabags are cheaper, getting the bus to another where items are on special offer and then a carefully timed visit to a store that marks down prices at the end of the day. However this is only possible if you are reasonably fit.

People taking part in our research talked about cutting down, doing without and making do. A couple of people said they just used a hob and microwave rather than facing the cost of a replacing a broken oven. Continue reading →

→ 3 Comments

Posted in General

Tagged , , , , , , , , , , , ,

State pension age – last chance for fairer reforms

Posted on September 1, 2011 | 4 Comments

There’s one last opportunity coming up for MPs to introduce changes to state pension age in a fairer way. The Pensions Bill currently before Parliament brings forward increases to state pension age. It would equalise men’s and women’s state pension age at 65 in November 2018, and then raise it to 66 by April 2020 – six years early than planned. This would result in nearly 5 million people having to wait longer than expected to draw their state pension. Among these are 330,000 women who will have to wait 18 to 24 months longer. At Age UK we believe these changes are happening too quickly without giving people time to rework their retirement plans.

We are currently awaiting a date for Report Stage and Third Reading in the House of Commons – the final opportunity for MPs to make changes. This could be in the week starting the 12 September.

We are encouraged that Secretary of State for Work and Pensions Duncan Smith, has said he wants to implement changes fairly and get the transition right. We are urging the Government to reconsider the position and at the very least introduce measures to protect those who would be most affected. For more information and details about how to get involved see http://www.ageuk.org.uk/get-involved/campaign/state-pension-age-campaign/

→ 4 Comments

Posted in General

Tagged , , ,

Little progress on pensioner poverty

Posted on May 26, 2011 | 2 Comments

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.

→ 2 Comments

Posted in General

Tagged , ,