Two million British pensioners are currently facing pensioner poverty, and the situation is getting worse. With costs of living surging, it’s not easy to survive on a tiny pension.
This is in sharp contrast to the view of baby boomers in the media. It’s often suggested that all baby boomers are sitting pretty with enormous pensions. But that’s simply not the case.
So why are so many pensioners living in poverty? Here, I take a look and suggest ways you can get help with your finances if you are a pensioner facing poverty.
Only the lucky few have great pensions
Some baby boomers lucked out with well-paid jobs and great final salary pension schemes. But many pensioners are surviving only on their State Pension.
And women who took time out to care for their families or older relatives could be even worse off. Many of them won’t have enough years of National Insurance contributions to get the full State Pension. Other women are currently facing issues with State Pension errors, meaning they aren’t receiving the full amount they’re entitled to.
Not all pensioners own their homes
Only a fraction of pensioners are living in large homes with their mortgages paid off. Many are still renting in retirement. Around 250,000 of those renting in the UK are over 65. And rental costs are increasing, rising 2.1% in the last year alone.
Many pensioners can’t cover the bills
Many pensioners have little in the way of savings and couldn’t afford to pay for an emergency. The latest government figures show that around a million pensioners would struggle to pay an unexpected bill of £200 or more.
Missing out on Pension Credit
It’s thought that some pensioners don’t know about Pension Credit. Others don’t realise they’re entitled to Pension Credit or are worried about applying.
According to Age UK, “Nearly a million (920,000) pensioner households are missing out on Pension Credit payments worth up to £1.6 billion every year – that’s an average of £32 a week, or over £1,600 a year, per recipient.”
Being on Pension Credit also allows pensioners to apply for other benefits. These include a reduction in Council Tax, so it can make a huge difference.
How to cope with pensioner poverty
If you’re a pensioner facing poverty, here are three things you can do:
- Find out if you’re eligible for Pension Credit. Many pensioners are living in poverty when they don’t need to be. You can apply for Pension Credit online, by phone or by post. Visit the gov.uk website for more information.
- Speak to friends or family. It’s important not to suffer in silence. Younger family members may be able to help with claiming Pension Credit. They can also help you find ways to save money, for example, by switching energy suppliers or buying cheaper presents at Christmas.
- Get advice. Age UK and Citizens Advice can help with applying for Pension Credit and other benefits. Citizens Advice and Stepchange also give advice on budgeting and getting out of debt.
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