No less Atlases

Along with thousands of people, I picked up a copy of the Evening Standard on the train the other day (9 November). But unlike those thousands, as I read it I recalled a lecturer of mine who used to say, mantra-like, that half-baked evidence is no evidence at all.

What prompted the memories from my cherished years as a university student was an article by Russell Lynch on the so-called ‘Atlas generation’ – i.e. people in their 20s and 30s. Lynch claimed they would be ‘sagging’ under the burden of the concessions for older people announced in the Comprehensive Spending Review (eye tests, concessionary fares, TV licences, and winter fuel payments spared from the cull plus the linkage of pensions to average earnings, and so on). 

The article concludes thus: “Penalising society’s poorest and genuinely deserving OAPs is no solution, but the old as a class can afford to pay more. Official figures show pensioner incomes rising 44% in the past 15 years — ahead of the average. And the Council of Mortgage Lenders puts the amount of unmortgaged housing equity held by households over 60 at £1 trillion and rising. The affluent baby-boomers around retirement age are the prime candidates to take the hit and it’s time the Coalition showed some nerve to set about the task.  It might just avoid alienating an entire generation choking on promises of ‘fairness’ and saddled with a bitter legacy of debt.”

Here I want to present some of the latest (2008/09) figures on poverty based on the usual poverty indicator – percentage of people living below 60% of median income, after housing costs (Source: Family Resources Survey and Households Below Average Income, ONS). I am leaving the issue of inter-generational fairness for a future contribution.

Almost 7.6 million working-age adults live in poverty in the UK – equivalent to 21% of all adults of working age. In turn, more than 1.8 million over state pension age live in poverty – roughly, 16% of all people over state pension age.

For working-age adults, having children increases the risk of falling into poverty: 26% of all adults of working age with children live in poverty (3.4 million) against 19% of those without children (4.3 million).

However there is a bigger poverty hazard than being a parent: having or not having a job. Of the 4.3 million adults of working-age living in poverty without children, about 60% live in households in which one of them is either unemployed or inactive. Of the 3.4 million in poverty with children, 36% of them live in households in which at least one of them is workless. In contrast, only 5% of working-age adults with children in full-time work live in poverty (about 130,000 people) – interestingly, the proportion is also just 5% for those without children in full-time work (0.5 million).

Very likely, these workless households now in poverty will eventually fill the ranks of the pensioner poor. A recent report using data from the 2008 English Longitudinal Study of Ageing (ELSA) found that reaching state pension age is not, of itself, a driver of poverty of income; instead, income poverty is one of the possible consequences of low-level pension provision and being out of the labour force.

If we now look in more detail at the 1.8 million pensioners in poverty, the main finding is that around 64% of them are outright owners of their houses. (Before housing costs, this rate rises to almost 80%). So, even though these households do not have to pay a mortgage or rent their accommodation privately, this does not spare them from the plight of living below the poverty line – a clear indication of the inappropriately-low incomes on which the vast majority of older people in the UK live which, again, as the ELSA-based report noted reflects their work trajectories more than their current age.

To compound this issue, generally speaking, their capacity of earning additional income is vastly reduced compared to younger people, and you get a very different picture from that of “the old as a class [who] can afford to pay more” – one that portrays most of the older members of our society as true Atlases, having carried financial and social burdens over their shoulders for most of their lifetime and still doing so today.

The announcements in the CSR represent a fair deal for older people thanks, not to a small extent, to our campaigning and influencing work. However, the figures above show that there is a lot of work ahead for Age UK to keep combatting poverty in old age, and articles such as Lynch’s suggest there is also a lot of work ahead for us to continue debunking myths and challenging tinted views and half-baked evidence, which as my former lecturer would have said without a cue, is no evidence at all.

3 thoughts on “No less Atlases”

  1. You’ve not actually answered the main thrust of that article. That the burden of the cuts is falling more on the young then the elderly.

    Also I am genuinely curious how if you own your home, you can be classified as living in poverty. I’m not disputing it as I don’t understand it.

  2. Sid,
    Thanks for your contribution. The incidence of the cuts by age group has been thoroughly analysed by the Fabian Society in a recent paper.
    What I wanted to discuss in my contribution was the portrayal of older people as a largely homogeneous, well-heeled lot. The reality is, unfortunately, very different.
    The official measure of poverty is known as ‘relative poverty’ and it is based on the median ‘equivalised household income’, in our case after housing costs. The EHI is that of the whole population, not just those of pension age. And the data show that 16% of all pensioners earn less than 60% of this median EHI after housing costs (60% of median income is the usual threshold to draw the poverty line, currently equivalent to £206 per week), of whom 67% own their house (most of them, own them outright, a small percentage are buying the property with a mortgage). That is, about 1.8 million pensioners do not earn at least £206 per week and therefore are classified as relatively poor, of whom 1.2 million own the houses they live in.
    Female pensioners are much more likely to be living in poverty than men: 67% against 33%. Also, 66% of these pensioners in poverty are not in receipt of Pension Credit, Housing Benefit, Disability Living Allowance or Atendance Allowance.
    Interestingly, 13% of them have savings or investments worth £20,000 or more.
    If we want to ook into poverty from a different angle, we can consider deprivation -when you ask people whether they can afford doing certain things.
    What the Department for Work and Pensions chillingly reported is that 11% of all pensioners in the UK wouldn’t be able to replace the cooker if it breaks down (87% of those said that they simply couldn’t afford it) or that 10% of the pensioners in the UK can’t get access to a taxi or a car if needed (again, 44% of them because they can’t simply afford it).
    Reaching pensionable age and not being able to replace a cooker -not in the process of a kitchen revamp but out of sheer necessity as the one you’ve got has broken down- is as bad as it gets, I think. And these are official data. And it’s data like these what brought me to Age UK in the first place, to try and contribute to the alleviation of these utterly unacceptable state of things.
    Keep reading our blog and keep posting!

  3. I find it disturbing having read elsewhere similar approaches to the pensioner group. Like many I fall firmly into the baby boomer generation having recently retired. My pension income is roughly 40% state 60% vocational & personal. I’ve even managed to reserve some of my other funds to cope a little further down the road. We also own our own property. All this while bringing up a family, 15%+ interest rates & 4 incidences of redundancy, the last two of which were past the age of 50. Through being prudent (a word that has been brought into disrepute by a certain politician) we now “enjoy” a life outside poverty. However, I know of a number of people, some a little older who while they own the property they live in, do not have the same cash liquidity as ourselves.
    What is worrying is that it’s being suggested elsewhere that the young are becoming antagonistic toward those of us who worked hard, didn’t get into debt (if you can’t afford it don’t buy it) & were careful with the resources at our control. The general state of affairs has arisen because of greed by the banks et al in only seeing an increase in revenues rather than capital, greed from society as a whole (live now pay later never was a good model), & foolish weak politicians who did not stand up to the banks & get them to behave like any other business – if you can’t trade profitably, you go to the wall (& Barclays chairman no less says governments were wrong to bail out failing banks).

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