Monday 20 June 2022 01:28 AM Alert for over-65s as one in seven are in poverty due to state pension age ... trends now
Around one in seven 65-year-olds were in income poverty in late 2020 due to the state pension age rising from 65 to 66.
A key effect of the rise, between late 2018 and late 2020, was that 65-year-olds missed out on pension income of £142 per week on average, said the Institute for Fiscal Studies think-tank.
The rate of absolute income poverty – less than £260 per week for a couple without children – for those this age rose by 14 percentage points to 24 per cent by late 2020. Emily Andrews, of the Centre For Ageing Better which funded the research, said: ‘It is crucial the Government gets serious on improving access to work for people in their 60s.
The report said: ‘The reform caused absolute income poverty rates (after accounting for housing costs) among 65-year-olds to climb to 24 per cent, some 14 percentage points higher than - or more than double - the 10 per cent, that we estimate it would have been had the state pension age remained at 65.’
Laurence O’Brien, a research economist at IFS and an author of the report, said: ‘We find that 14 per cent of 65-year-olds were in income poverty in late 2020 as a direct result of the state pension age rising from 65 to 66, with this concentrated amongst renters, single people and those with lower levels of education.’
The IFS said that due to increasing the state pension age from 65 to 66, the income poverty rate of single people aged 65 rose by 22 percentage points, from 16 per cent to 38 per cent and the rate for 65-year-old renters rose by 24 percentage points, from 22 per cent to 46 per cent.
Associate director at IFS and the other author of the report, said: 'The rise in the state pension age led to a bigger increase in income poverty'
With lower state benefits and higher tax revenues from employment, the increase in state pension age from 65 to 66 boosted the public finances by £4.9billion per year, equivalent to around a quarter of 1 per cent of national income, or 5 per cent of annual government spending on state pensions, the IFS said.
The state pension age is regularly reviewed.
Jonathan
