17th July 2014
British pensioners face a very bleak future unless the Government properly tackles the long term challenges of working age poverty, an influential think tank has warned.
According to an analysis by the International Longevity Centre (ILC-UK), in 2012/13, pensioner households were less likely to be on a low income than households with working age adults or households with children.
This marks a stark contrast to 15 years ago when low incomes were far more prevalent across pension households than working age ones.
The figures are set out today by ILC-UK highlight that whilst pensioner poverty has fallen substantially, the future may not be so bright – it concluded that whilst 1.6m pensioners are experiencing relatively low incomes, pensioner poverty has fallen drastically over the last 15 years.
However in contrast, the proportion of households with working age adults and households with children living on low incomes has remained relatively stagnant and relative poverty among working age adults without children has increased.
ILC UK research, which was supported by specialist insurer Partnership also concluded:
Last week, the Office for Budget Responsibility predicted that by 2063, age related spending will equal 25.1% of GDP compared to 20.4% in 2018.
Ben Franklin of ILC-UK said: “We have made fantastic strides with tackling pensioner poverty over the last 15 years. But future generations may not be so fortunate. A combination of high house prices, low levels of saving and working age poverty presents significant challenges for tomorrow’s pensioners. These are long term problems which require action now.”
Richard Willets, director of longevity at Partnership added: “Alleviating pensioner poverty is something that we all agree should be a priority. However, rather than simply concentrating on those who are in retirement at the moment, we also need to think about the longer-term future. Those who are experiencing working age poverty at the minute are less likely to be in a position to save, buy their first home and start a pension– all steps which can put them on the road to a more comfortable retirement. Even with positive moves such as auto-enrolment, we seriously need to consider how we can do more to solve this problem and avoid storing up issues for the future.”