Pensioners are worse off now than 50 years ago

Kay Mitchell | December 7, 2007 | 0 Comments

According to figures published by the LibDems, today’s pensioners are worse off than they were in the 1950′s. Back then, the average full-time weekly wage was worth £7.08 (equal to £499 in today’s money) while the basic weekly state pension was £1.36 (£91.65).

In 2006, the average wage had increased to £549.80, but the pension was just £87.30 meaning pensioners have less money to spend today than in 1950. The figures show that today’s state pension is just 15.9% of the average wage, compared to 18.4% 57 years ago.

Furthermore, today’s pensioners are no better off as living costs such as utility bills and council tax are increasing at much quicker rate than their state pensions.

A spokesperson for the LibDems said these figures are disgraceful. We have had a Labour government for over a decade yet pensioners are getting even less than under Margaret Thatcher. Back in the 1980′s when Mrs Thatcher was Prime Minister, the pension was worth 24.4% of the weekly wage.

The spokesperson continued with the convoluted pension credit failing to reach many pensioners, the Government should immediately restore the link between pensions and earnings as a first step towards providing a decent state pension.

It was also declared this week by the Conservative party, that the number of pensioners in severe poverty is also on the increase. Parliamentary answers reveal a rise in the amount of the poorest pensioners to 460,000, up 10,000 in a year and practically the same level as in 1997 when Labour came to power.

In addition, the current pensions credit system is so complicated that 1.7 million fail to claim it while many are facing means-testing for benefits.

The figures coincided on the same day that Mike O’Brien, Pensions Minister, confirmed that the state pension will increase to £90.70 for individuals and £145.05 for couples from April 2008. However, this will go nowhere near closing the gap between today and 1950.

The Government’s new Pensions Bill also received its first reading on Wednesday, meaning 9 million more people will be saving towards their retirement. The Bill will make it compulsory for all workers aged over 22 who are earning more than £5,000 a year to join a workplace pension into which their employer contributes.