Pensioner poverty should be as hot a topic as the weather!



This morning – 25 people are going to wake up and decide whether to go into Central London to attend a meeting on the impact of the cost of living on pensioner poverty.

I hope that the majority will be brave and make it to our meeting. The people who are suffering most from the current weather conditions are the very people who we will be trying to help.

The financial services industry has a limited part to play in this. The really heavy lifting has to be done by the Department of Work and Pensions, funded by the Treasury. There is much they are doing and more they can do (include learning a little about database management!).

But it’s good that they are working with us towards solutions that we can put in place – to alert pensioners and soon to be pensioners of their right to claim pension credit.

The appetite of some of the leaders of our financial services companies to the invitation to the meeting, will be a good barometer of the potential for change. If today is too hot, so perhaps are the issues with which they must grapple.

As this graph from the ISF shows, absolute poverty levels have been falling in recent years for those who have reached state pension age. But there appears an acute problem for those who reach what used to be considered the normal retirement age (65) and now have to wait two years for their state pension.

In November 2018, State Pension age was 65 for men and women. However, this is gradually increasing and now depends on when you were born.

Bridging the poverty gap in the years running up to the new state pension , The Family Resources Survey, from which these numbers are taken does not take into account capital drawn down from workplace pensions.

I am a firm believer in using money saved for retirement to bridge to the state pension when the alternative is poverty in the years leading up to the State Pension Age.

But as this chart from the same survey shows, just under half of the UK working population are still not participating in formal retirement savings plans.

And informal saving is little better.  Four in ten families had either no savings or investments, or less than £1,500 in savings and investments. A sixth of families had savings and investments of £30,000 or more.

This inequality is not something that the financial services industry can do anything about overnight, nor indeed the Government. But we do need to recognise that the longer that we keep pushing back the 2017 AE reforms and in particular the extension of some form of AE to the self-employed, the more likely we will have persistent problems with pensioner poverty for those in their sixties.

So any commitment from the financial services community to help improve pension credit participation should be matched by the Government in improving participation rates in auto-enrolment.

We’ll see if that equation is made today – I expect the pensions industry to  be challenged by Guy Opperman for our commitment and I expect it to politely  challenge back.  Meeting both challenges is the best hope for those struggling with pensioner poverty today – and tomorrow.

We can no more deny the need for action on pension credit than we can deny the impact of climate change on our lives.


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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