There are currently 11.8 million in the UK who are over 65 years old, and 1.6 million over 85. Figures also show there has been a 65% increase in centenarians in the UK over the last ten years.
By 2030, it’s predicted that there will be more than 20 million people aged 60 or over. Ten years later, by 2040, almost one in four people in the UK will be over 65. With figures like these increasingly pointing towards the fact that we will live longer than ever before, preparing financially for the future has never been more important.
Within the UK’s population of older people, 3.64 million aged 65 and above live alone. Almost 70% of these people are women.
The last year we have official figures for (2015/16) shows that the average net income for pensioners living alone was £250 per week. This is before housing costs – the figure after housing costs s £205.
For couples, the figures stood at £466 before housing costs are removed, and £436 after. However, average figures don’t show the whole picture.
The least wealthy fifth of single pensioners are surviving on £106 per week, after meeting their housing costs. The richest fifth had £408 per week. For couples, the poorest were at £224 per week, and the richest at £911 per week.
Around 26% of the older population in the UK report that they are ‘just getting by’ and finding it difficult. Worries for this generation include the cost of food, heating their homes in winter, and the general cost of living.
As of November 2016, 1.9 million pensioners in the UK were living in poverty. This is defined as having incomes below 60% of households. Out of this figure, one million are reported as being in severe poverty.
Older pensioners (85 years plus), single people who live alone, private tenants and pensioners from ethnic minorities are at the highest risk of poverty.
Combating pensioner poverty
One of the biggest problems in tackling the persistent problem of pensioner poverty is the fact that many people simply don’t realise they’re entitled to assistance from the government.
Older people are entitled to means tested benefits that have been designed to help them increase their income. Many people don’t receive these ‘top ups’ and are therefore left to struggle.
In 2016, Age UK helped older people to identify and claim around £160 million worth of benefits. There are many people who continue to miss out on money that is rightfully theirs, and therefore struggle to afford essentials, including heating and food.
Figures show that about a third of older people who are entitled to Pension Credit weren’t claiming it, missing out on more than £1700 per year. In addition, 2.2 million older people were missing out on the help they’re enutled to for their council tax bill, which on average would have reduced it by £728.30.
A further 390,000 older people could have claimed Housing Benefit to reduce their rent, but didn’t.
Why are people missing out?
In simple terms, older people aren’t taking up the benefits they’re entitled to. An enormous £5.5 billion goes unclaimed every year.
The barriers to older people claiming this money is the lack of awareness and understanding of benefits, such as Pension Credit. Around 75% of older people didn’t realise that they were entitled, and just 16% feel well informed.
Many people assume they’re not eligible, thinking that any state top ups are for people worse off than them. They also tend to think that if they’re a home owner, they’re not eligible. Some older people refuse to become a ‘benefit claimant’ out of pride, and 62 per cent say they don’t like making a claim.
Putting plans in place as early as possible can help people avoid falling into the trap of poverty when they reach retirement age. Thoroughly researching what they are entitled to is the first step.
Having a savings plan in place is also key, with those that plan ahead less likely to suffer later on.
Local and central government making information more accessible would go a long way to help the older generation understand what they’re entitled to. However, this can’t be relied on, and taking control of the situation is advisable.