Pensioner poverty 'set to stay'

from the BBC

Poverty among pensioners is set to persist despite government plans to overhaul the state pension system, a leading think tank has said.

The Institute for Fiscal Studies (IFS) said that pensioner living standards would rise in the next decade - but not any faster than the rest of society.

As a result, the number of over-65s in relative poverty is likely to stay at one in five between now and 2017-18.

The government has introduced pension credits to boost pensioners' incomes.

The credit, which came into force in 2003, guarantees a minimum income of £119.05 a week for a single person.

For a pensioner couple it currently guarantees an income of £181.70 a week.

Reforms

The IFS suggested some reforms that had to happen if pensioner poverty is to be cut further.

The state pension could be reformed so that it was universal and based on residency rather than national insurance contributions.

Also, increasing the basic state pension to the same level as the pension credit could help to alleviate poverty.

That change would cost £8.3bn a year, but lift 600,000 pensioners out of poverty, the IFS said.

However the think tank has calculated that cuts to council tax bills for the over 65s would not significantly reduce pensioner poverty.