Pensioners in Poverty 

The Herald

United Kingdom

July 14, 2008

Anyone who thinks that the image of a poor spinster or widow forced to choose between eating and heating has been consigned to history should take a look at yesterday's figures from the Office for National Statistics, showing that nearly two-thirds of Britain's single elderly receive pensions of less than £10,000 a year. Three-quarters are women. The figures may not include income from continued working, investments, property and savings, but for many it is the only money coming in.

In recent years, pensioners have fared well. Low inflation, plus the introduction of pension credits and winter fuel payments, mean average pensioner incomes increased by 37% in real terms between 1995 and 2005, while earnings climbed just 18%. The Labour government claims to have pulled more than two million pensioners out of poverty.

Even so, many are still struggling to juggle their bills and recent rises in food and fuel prices hit those at the bottom hardest. Many pensioners are facing personal inflation of 10% or more. Help the Aged calculates that every time power bills rise by a further 5%, up to 15,000 Scottish pensioner households are pulled into fuel poverty. And while government programmes have improved fuel efficiency in thousands of homes, it would take a further £700m to bring every Scottish home up to tolerable standard. Worst-hit are the elderly rural poor who suffer the double whammy of living beyond the reach of gas mains and distant from public transport routes.

Yesterday the Prime Minister was talking about the government's responsibility to help the most vulnerable through hard times. The raised winter fuel allowance and recent deal with the power companies on targeting low-income households barely scratch the surface. If our pensioners are to retain the progress they have made, they need more support to tackle inflation. The most obvious way to do this would be to restore the link between pensions and earnings. This is pencilled in for 2012 but three million British pensioners will be dead by then.

Reforms to National Insurance will make it easier for women with caring responsibilities to qualify for a full state pension in future but that does not help thousands of today's elderly women who have not been able to accumulate a decent pension.

The government's answer is pension credit, but for a number of reasons - complexity, ignorance, pride - as many as half those entitled to it do not claim it. Yet the government has all the information required to calculate who qualifies. Instead of sitting on its hands and underfunding the pension credit budget, it should take the stigma out of pension credit by making it look less like charity than an entitlement and pay it automatically. At least that would mean that no pensioner was trying to live on less than £124 a week. At present, many of those who do not claim are those who most need it.

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