Inequalities among poorer pensioners

More than two million retired people live in poverty with minorities more at risk

THE number of older people in poverty has reached its highest point in nearly two decades - with Black and Asian pensioners most likely to suffer financial hardship. The Department for Work and Pensions (DWP) estimates that 2.11m retired people were living on a relative low income in 2019/20.

That means they’re living in households with income below 60% of the median income of £24,750 after housing costs, the equivalent of around £14,850 per year or less.

The number was up from 1.88m pensioners in 2018/19 and also the highest number since 2003/04, when it was 2.16m.

Older Asian and Black people were more likely to be living below the poverty line - 33% and 30% respectively of pensioners in these groups were on a relative low income after housing costs.

That compared to 16% of older White people. A breakdown was not available for other ethnic groups.

Despite these worrying figures, the government announced in September that the annual rise to the state pension will be temporarily watered down. That’s to avoid a costly surge in payments for retirees in the aftermath of the pandemic.

Under the triple lock system, the state pension is supposed to rise each year in line with inflation, earnings or by 2.5%, depending on whichever is higher.

However, as people come off furlough and return to full pay after the pandemic, the rise in average earnings is set to be an estimated 8%, meaning state pensions would need to rise by a similar amount.

But the government decided the average earnings component would be disregarded in 2022-23 (as it was last year) and the rise will temporarily be replaced with a ‘double lock’ linked to either inflation or the 2.5% increase.

Experts, such as the charity Age UK, admitted temporarily removing the triple lock for a year is “a price worth paying” if it helps ministers agree on a deal on social care.

However, they warn it shouldn’t just be an excuse for the government to scrap the triple lock system altogether.

A spokesperson for the charity said: “With more than two million pensioners currently living in poverty, there’s a strong case for keeping the triple lock as it is at the moment. However I do think most older people will understand if they receive only a relatively modest State Pension increase next April.

“It is however imperative that the triple lock reverts to normal next year to help all those pensioners on low and modest incomes who desperately need it.”