Old and invisible: The state pension age increase is pushing thousands into poverty

A new report that shows that nearly 100,000 people in a certain population were forced into absolute poverty within a two-year time frame due to one factor might lead you to believe that COVID or the cost of living crisis is to blame.

It may surprise you to learn that the real cause of this sudden increase in poverty is due to the rise in the state pension age. This rose by one year to 66 for both men and women between October 2018 and October 2020.

Although the one-year change may not seem significant at first, it is quite significant.  It may not seem like a lot, but the result is that more than twice as many people 65 and over are living in absolute poverty (about 165,000) now than they were before this change. I hope you share my shock.

If you are 65 – there is now a one in four chance that you are living in absolute poverty.


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It is deeply alarming that a major government program could have such a severe negative impact on the lives so many older people.

With the right support and action, raising the state pension age can make it possible for older workers to continue to make a valuable contribution to the UK’s economy and workplace. This will allow them to earn additional income and increase their pension pots. A truly diverse workforce that includes everyone from 16 to 65 years old is a benefit for everyone.

Many employers already know this and are reaping the benefits of employing greater numbers of older worker in terms of productivity and addressing their skills shortages. It’s not a charity case for employers to do this, it is just good business sense.

The logic behind raising the state retirement age is that we all live longer and are more able to work beyond the age of previous generations. If this logic is to be realized it will take more to ensure that people are able to spend the extra time required to claim their state pension in decent work.

The Institute for Fiscal Studies (IFS), a newly published report, has been published. Current and future work patterns among those at state pension age, commissioned by the Centre for Ageing Better, should be essential reading for Baroness Neville-Rolfe who is currently conducting the second Government Review of State Pension age.

The review is scheduled to be published in May. It will examine if the statutory timetable for raising the state pension age from 68 to 68 by 2046 should been accelerated. Clearly any reform from this review won’t benefit the tens of thousands of people already in absolute poverty and those at risk of being so in the near future as a result of the most recent increase in state pension age.

The IFS analysis reveals that when the state pension age was raised the net income of 65-year-olds reduced by an average of £108 per week.

Even more worrying is that it’s further exacerbating inequalities in society. The year extension was most detrimental to those with lower incomes, single persons, renters, and those whose formal education ended at GCSE level.

The report also shows that people who are not employed have the highest levels of poverty. Many of these people will have struggled to find work, failed to find the right job or were subject to discrimination based on their age in the recruitment process. Others may have caring responsibilities or medical conditions, but employers are unwilling to make reasonable adjustments or allow them to work.

These shocking statistics are another reminder that the Government must urgently prioritise improving access to work for people in their 60s: investing in tailored employment support for those out of work, expanding access to occupational health support, and bringing flexible work and carer’s leave proposals into legislation. Failure to do so will likely result in tens of thousands more people falling into poverty each year.

However, even if all this is done in the time frame required by the current circumstances, some people will simply not be able to work. As a direct result of the State pension age being raised, these people may still be in poverty.

Beyond a significant increase in support for older workers to remain in work for as long or as they are able, the move to push the state pension age further back must be accompanied by a comprehensive review of how our social insurance system supports us as we age.

The consequences of raising the state pension age are now clear. We need to find ways that we can reduce the hardship faced by those whose ability is affected in the years prior to reaching pension eligibility.

I hope the government will not accept that the years leading to retirement will be difficult and cash-strapped, as a price to maintain public spending.