Pensioners' incomes rising fastest, says IFS

 

The BBC's Simon Gompertz meets the pensioners and young people 'reversing' roles

UK pensioners' incomes have risen faster than all other age groups in the last 30 years, a study has shown.

The study from the Institute for Fiscal Studies (IFS) described the trend as "a triumph of social policy", arguing that poverty in old age was being reduced.

The research also found that the over-60s are the only age group to have become better off since 2007/08.

The findings may fuel the debate over how much protection pensioners should be given from austerity measures.

'Younger' poverty

The IFS said while older people had become richer on average since the beginning of the financial crisis in 2007/08, younger people had become poorer.

The median - or middle - income of the over 60s grew by 2-3% between 2007/08 and 2011/12, continuing a long-term trend, it said.

This was primarily the result of the stability of benefits such as the state pension.

Yet, the median income of people in their 20s fell by 12% over the same period, allowing for inflation. This was the largest fall of any age group, owing to low or frozen wages and high unemployment.

"The face of poverty has become much younger during recent decades," said David Phillips, a senior research economist at the IFS.

"It is young people who have suffered most as a result of the recent recession and who are now at risk of falling further behind.

"It is important that policymakers and politicians understand these profound changes to patterns of low incomes and respond accordingly."

European comparison

In the early 1960s and early 1970s, the pensioner poverty rate was much higher than for working-age adults.

But the gap has now shrunk significantly, with many pensioners also benefiting financially from owning their own home.

Children playing football Other figures have shown that one in six UK children live in poverty

But while the IFS report suggested that pensioner incomes had risen in contrast to others, it did not say that they had become wealthy.

Pensioners were still more likely to be found in the poorer half of the population, the IFS said.

Previous research by the OECD showed that pension income is much lower in the UK than a large number of other developed nations.

Official statistics recently ranked the UK as fourth out of 27 European countries in terms of risk of the over-65s ending up in poverty.

Some pensioner benefits are aimed at assisting people to heat their home in winter. Yet, there are 2.25 million older households in fuel poverty - the equivalent of four million pensioners.

Charity Age UK said older people were more likely than other age groups to be affected by fuel poverty because of their low, fixed incomes and poorly insulated homes.

However, a spokesman for the Department for Work and Pensions (DWP) said: "This government restored the link to earnings on the state pension, and went further to introduce the triple lock, and protect a group that is less able to boost their incomes through work.

"These [IFS] statistics show that progress has been made, and the value of the basic state pension is its highest relative to earnings for 20 years."

But Michelle Mitchell, Age UK's charity director general, said: "While it is true that some older people have seen their incomes rise in recent years, there are still huge inequalities prevalent within the older generation as well as the general population as a whole."

Poverty figures

The IFS report, which was funded by the Joseph Rowntree Foundation, goes on to say that working-age adults without children are now as likely to be poor as the rest of the population.

This was the result of an increase in households where no adult is in work, as well as a fall in the relative value of out-of-work benefits.

The figures come a day after figures from the DWP showed that at least one out of every six children in the UK live in relative poverty.

In 2011/12, 2.3 million UK children (17%) lived in homes with substantially lower than average incomes.

The government said it was focussed on getting children out of poverty by getting more people into work.

 

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  • rate this
    +1

    Comment number 640.

    @636 Gerald
    Fair play you don't have to ask for help my biggest achievement was passing my GCSE's and various vocational qualifications. I am a perennial drop out so don't worry. My true education is simply reading books.

  • rate this
    +2

    Comment number 639.

    637 Economically ignorant (Ei to save characters)
    Agreed,we need to redefine what the word "profit" means,that's all!!!
    Remember,these "advances"protected and perpetuated the status quo!
    So,there could be a correlation with the animals own mortality and vested interest between "war"and "advances"

  • rate this
    +2

    Comment number 638.

    637. Economically ignorant
    JUST NOW
    @630 Gerald
    I respect what your response is stating and the ltd characters doesn't help. But consider this some of our most technological advances have happened during war times ask yourself why this was.
    ==
    The illusion of choice?

  • rate this
    0

    Comment number 637.

    @630 Gerald
    I respect what your response is stating and the ltd characters doesn't help. But consider this some of our most technological advances have happened during war times ask yourself why this was. I would say it was because it suited an agenda so if we can do it during these times why not when it benefits a future generation. I would say because it has to have profit first.

  • rate this
    +1

    Comment number 636.

    631 Economically ignorant
    "We don't choose"etc,same as air or parents etc,semantics,but your right!
    You need a lot of "you's",or a very,very bright "you",and even then,the majority to follow and buy-in,so-to-speak!
    Don't knock being "a number",it's what the game is,the rules applied,and that we ALL benefit......
    Now,here's the rub,I'm not "very bright"or indeed just bright,so ,HELP !!,anyone!!!!

  • Comment number 635.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    0

    Comment number 634.

    624: Ewan, we need to eliminate surplus children when parents lose their jobs, or when they divorce to reduce the drain on public finances. The other benefit of only allowing rich people to have children is that we improve the gene pool, since rich people are obviously better people. Irony
    Sally, thanks for making me laugh.

  • Comment number 633.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +1

    Comment number 632.

    626. Sally says you are free
    623.paulmerhaba
    I'm glad you agree with me. Because, if you were "as greedy as me", you'd only keep what you earned to yourself, and would leave me alone, and I would reciprocate.

    *Best not to answer reciprocal questions in future, lest you become "hoist with your own petard," again.
    --
    I have been blamed for the menopause, but i do refute hoisting petards.

  • rate this
    0

    Comment number 631.

    @614 Gerald
    And we don't choose to be in the system we are born into it if you want to be a productive member of society. Whatever discipline you choose to work in you are still simply a number I know this is a bit deep but the only person who can change this is you.

  • rate this
    +2

    Comment number 630.

    621 Economically ignorant
    OK,lets go for it shall we,within ltd characters!
    So,we have to create a methodology of self sustaining,pollution free,mutually accessible to any and all,no matter their health,age,intelligence etc etc
    We all are part,no matter our gifts or not of (Voyager)the collective!
    Now,how do we set about this ideal and lofty ambition for our and the planets survival,run out sorry!

  • rate this
    +1

    Comment number 629.

    #625 Gerald
    I find it incredibly frustrating that the exchequer is desperate for revenue and yet the government seems to ignore the huge tax gap which even by the conservative estimates is £50 million pa.

    #622
    Hilarious. Dodgy Dave to the rescue!

  • rate this
    0

    Comment number 628.

    620. Sally says you are free ~ Sally, squeezing the pips has become so avante garde amongst those who hide behind Black Scholes Merton type equationing, that stopping income tax would herald reduced rates of pay and increased profits. I'm surprised. Capitalists believe Nobel winning economists have relieved them of obligation because taxation can be excluded from trading algorythms

  • rate this
    +1

    Comment number 627.

    582: Remember over 90% of those on benefits have had a job in the last 2 years. Remember the large % of those on benefits in work right now. The 'army of total skivers' painted by the Tories is not so big after all and when we have more employment should be made to work.

  • rate this
    0

    Comment number 626.

    623.paulmerhaba
    I'm glad you agree with me. Because, if you were "as greedy as me", you'd only keep what you earned to yourself, and would leave me alone, and I would reciprocate.

    *Best not to answer reciprocal questions in future, lest you become "hoist with your own petard," again.

  • rate this
    +2

    Comment number 625.

    618 Billythefirst
    My hit list no1,is corporate hypocrisy & the assumption that both it's own employees,customers,and the public in general are stupid!
    They dodge,sorry locate their profits off-shore(avoidance)and save a £Billion$ by paying,say,5% cor tax,whilst their staff pay 20%,and are educated etc to become their staff from tax,then give? $100£ million to causes that wouldn't need to exist!!

  • rate this
    -1

    Comment number 624.

    government said it was focussed on getting children out of poverty by getting more people into work

    rubbish!

    remove child benefit completely

    and people will only have children if they can afford them

    keep child benefit and you will never eradicate child poverty

    too many people in the world and in the uk

    population explosion isnt addressed by giving benefits to parents

  • rate this
    +1

    Comment number 623.

    620. Sally says you are free
    "let me offer you my definition of social justice: You keep what you earn and I keep what I earn. Disagree? Well then tell me how much of what you earn belongs to me- and why?"
    ~Walter E. Williams
    --
    Everything cos I am just as greedy as you.
    Wile E. Coyote

  • rate this
    +2

    Comment number 622.

    It looks like we are to invade. Bermuda.

    http://m.guardian.co.uk/politics/2013/jun/14/tax-secrecy-central-register-cameron

    Fight them on the beaches, Dave. :)

  • rate this
    +1

    Comment number 621.

    @614 Gerald
    It's not about philosophical debate just think outside the capitalist box we've all been indoctrinated to believe is the norm. We've all been fed that this is the only way to function but in the next breath, mass consumerism is destroying the world. Yet no one considers this, is that the legacy you want to leave your children judging by your responses I would say not.

 

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