January 28, 2010

UK: Pensioners in Poverty - 2 Million Too Poor To Heat Homes

. LONDON, England / The Daily Express / Retirement / January 28, 2010 By Sarah O'Grady, Social Affairs Correspondent TWO million pensioners are still living in poverty with half of them so poor they cannot afford to heat their homes. And decades of failure to guarantee older people a decent pension means fewer are able to rely on the state pension to pay the bills. In 1977, 53 per cent of the average retirement income was made up of the state pension - now the state pension makes up just 37 per cent of the money pensioners have coming in. Pensioners: 2million are too poor to heat their homes This leaves hundreds of thousands of older people with no private pension or savings living on the breadline. The depressing picture of old age in Britain was revealed in official data released by the Office of National Statistics yesterday. Latest figures show that, in 2007 one million pensioners in England were living alone and unable to afford fuel - meaning they have to spend more than 10 per cent of their income on heating. Hefty rises in energy prices in the two years since mean many more pensioners are likely to have fallen into fuel poverty since then. Dot Gibson, general secretary of the National Pensioners Convention, said: "At least one in five pensioners are living in poverty with millions more just struggling to make ends meet. "Older people are spending as much as 40 per cent of their income on fuel, food and council tax - leaving them with very little to live on. "The reason for this is that successive governments have allowed the value of the state pension to fall as a result of linking it to prices rather than earnings - so that it is now amongst the worst in Europe. "We need a state pension of at least £165 a week that takes all older people out of poverty." The Liberal Democrat's work and pensions spokesman Steve Webb said changes to the pension system had failed to help many older people. "It is still the case that pensioners who are forced to rely on the state pension and Labour's complex and undignified system of means-tested benefits are more likely to live in fuel poverty," he said. "The basic state pension is simply too little to live on for the millions of pensioners who have no other income." The Daily Express crusade Respect for the Elderly has highlighted the poverty faced by pensioners struggling to get by on a state pension of just £95.25 a week for a single person or £152.30 for a couple. Poverty is officially defined as living on 60 per cent of the average income, once housing costs have been paid. Income from a company or private pension scheme is a crucial factor in determining whether someone will be well off in retirement or not. "In 2007-08, pensioners with private pensions were more likely to be in the top 20 per cent higher income groups for the whole population, while those without private pensions were more likely to be in the bottom income groups." reported the ONS Pension Trends survey. But the increasing reliance on private and company pensions is very worrying because more and more employers are cutting back on expensive salary-linked pension plans. Earlier this week the Equality and Human Rights Commission called on the government to scrap the default retirement age to make it easier for older workers to stay in employment. David Sinclair, head of policy and research at the International Longevity Centre thinktank, thinks this would help the fight against pensioner poverty. "We need greater support for young people to enter the job market and for older people to stay in active employment, if they choose to do so. "For older people, flexible working and allowing people to continue to work past 65 years of age is critical if we are to achieve this goal," he said. However, according to the ONS, the number of pensioners living in poverty has fallen by nearly a third from 2.9million in 1998/99 to two million in 2007/08. Figures also show the liabilities faced by unfunded public sector pension schemes fell to £770billion in March 2008, down from £810billion 12 months earlier - although it said much of the improvement was due to changes in accounting.[rc] Copyright ©2006 Northern and Shell Media Publications