1.8 million of UK pensioners living in poverty

| March 7, 2008 | 0 Comments

Approximately 1.8 million of UK’s 11 million pensioners are living in poverty, the majority of them women.

The UK’s basic state pension of £87.30 a week is among the worst in Western Europe. 100 years ago, when the state pension was introduced, it was roughly 25% of average earnings. However, today it is 15% of average earnings, according to the National Pensioners Convention.

From next month, the basic state pension is set to rise by £3.40 a week, it remains linked to prices inflation and will be until at least 2012.

Poorer pensioners, however, can top up their income to at least £119.05 per week if they’re single, or £181.70 for couples, by claiming the Pension Credit.

However, according to Age Concern, £2.5 billion went unclaimed last year, primarily due to the fact that pensioners are unaware that these benefits exist or they don’t know how to claim them.

From April, hundreds of thousands of the poorest pensioners under 65 (the majority women) will actually be worse off as the Government’s is scrapping the 10p starting rate of tax.

For example, a pensioner aged under 65 with an income of £7,000 a year will pay £313 tax instead of £177.50 this year. Older pensioners will escape because of big increases in their tax-free personal allowance.

Pensioners will also suffer to struggle to pay utility bills due to the massive increases in energy costs.

Consumer group National Energy Action estimates that fuel poverty (when a household spends 10% or more of its income to meet fuel costs) affects 4.5 million people in the UK. A large majority of these are pensioners.

A recent report from the think-tank, Policy Exchange, discovered 75% of private sector workers are facing poverty in retirement. The organisation warned the scale of Britain’s pensions crisis is ‘worse than originally feared’.

According to the report, they do not have a company pension or any other type of pension savings apart the State pension, which is £87.30 a week.

It is believed that many will have to continue working into their late sixties or seventies in order to meet household demands. Research shows that 1.2 million pensioners are already working with the number increasing.

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