Number of pensioners in poverty has fallen by one million
There are one million fewer pensioners in poverty than a decade ago, according to figures out today from the Office for National Statistics but over this period the proportion of pensioners' income that comes from working has almost doubled, while the proportion coming from the state has fallen.
In 1999/2000 there were 2.8 million pensioners in relative poverty as opposed to 1.8 million in 2008/09. In 1999/2000 earnings from work made up 8% of pensioner’s income on average; by 2008/09 this figure had risen to 19%.
In 1999/00 state benefits made up 52% of pensioner income on average; by 2008/09 this figure had fallen to 43%.
Although pensioner poverty has receded there are still some groups of pensioners who are falling behind the rest.
The bottom fifth of pensioner couples received total income of £10,244 per annum, compared with the £39,260 received by the top fifth
Pensioners over 75 had on average 22% less income than pensioners under 75. This is almost entirely down to earnings from work dropping out of their income.
There is also evidence private pension saving is woefully inadequate for many, despite the fact that this generation of pensioners were at work during a much more generous pension environment than exists now.
Laith Khalaf, pensions analyst at Hargreaves Lansdown, said: "The fall in the number of pensioners in poverty appears to be largely attributable to pensioners themselves, who are increasingly continuing to work to generate income. Employers and the state are scaling back pension provision so we can expect this trend to accelerate for future generations of pensioners, unless they make substantial retirement savings of their own.’
"These figures suggest we desperately need encouragement to save more, not spend more as the deputy governor of the Bank of England would have it."