UK Has Worst Rate of Pension Poverty in Europe

UK Has Worst Rate of Pension Poverty in Europe

28th August 2019 3 By Alex Tiffin - @RespectIsVital
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A new report has reveled that the pensioners in the United Kingdom suffer from the highest rate of “pensioner poverty” in Western Europe. The study shows that those eligible for the State Pension are FIVE times more likely to face financial hardship. This comes as Iain Duncan Smith’s think tank CSJ suggested the retirement age should increase to 75 by 2035.

Earlier this week the architects of Universal Credit, The Centre for Social Justice (CSJ), suggested the retirement age to 75 by 2035. Now a study has shown that poverty rates amongst pensioners in the UK have risen fivefold since the 1980s.

The figures taken from the Luxembourg Income Study, which has data covering decades, the authors of the report were able to show poverty amogst the elderly has risen from 0.9% in 1980 to 5% by 2016.

Some of the key points from the study conducted by Professor Bernhard Ebbinghaus, of the University of Oxford are;

  • In the mid-1980s 0.9% aged 65 and overs in the UK were living in severe poverty, putting it equal-lowest in poverty rates of 16 western European countries Prof Ebbinghaus studied.
  • In 2008 this had risen to 6%, the third highest in Europe.
  • Fast forward to 2016 and the rate had settled at 5% the current highest rate in Western Europe.

Rise of the Privite Pension to Blame

Signpost showing Private vs Public

Ebbinghaus told the European Sociological Association conference;

“The United Kingdom is a good example of the Beveridge-lite systems that have historically failed to combat old-age poverty,”

“These have rather ungenerous basic pensions with means-tested supplements, and this reproduces relatively high severe poverty rates among the elderly. British basic pensions are particularly low, 16% of average earnings, and require a long contribution period. Income-tested or means-tested targeted benefits are needed to supplement basic pensions and to lift them out of severe poverty – every sixth British pensioner receives such additional benefits.”

As well as calling the UK State Pension “ungenerous”, the study found that countries like the UK, who had shifted towards forcing pensioners to rely on private pensions, had seen an increase in inequality.

He recently told the Guardian;

“The comparison shows that the shift toward increasing privatisation amplifies the already existing level of social inequality,

“As welfare states have been challenged by the financial and economic crises of the 2000s, individuals relying on funded pensions have also faced volatile financial risks,

“The adequacy of retirement income has often been neglected from current debate, partly because poverty in old age seemed no pressing concern in advanced welfare states – until recently.”

Iain Duncan Smith Touts Working to 75

Iain Duncan Smith Centre for Social Justice
Iain Duncan Smith MP, Chairs the CSJ think tank

The damning report on pensioner poverty coincided with another controvertial report, this time by the think tank; The Centre for Social Justice (CSJ).

The CSJ , who’s chair is former Work and Pensions Secretary Iain Dunca Smith, released a study on raising the retirement age.

Almost immediately the CSJ and IDS faced a backlash after they recommended that the age of retirement should rise to 75 by the year 2035.

The former head of the DWP attempted to frame this is a way to omprove pensioners lives, that this was a godd thing. However, many noted that the average life expectancy for a man in the UK has fallen to 79, and this was no more than a cost cutting exercise.

This move would see workers paying in more to their state pension pot, but getting less back due to the shorter life exspectancy. Also, it is worth noting that while some jobs would be suitable for a 74-year-old, many wouldn’t.

This would mean pensioners in industries such as construction would have to try and seek out an entire new career near the end of their working life. It could also lead to higher stress levels and an increase in workers being signed off due to failing health.

It’s not to say that no 65 plus year-old can’t work until they’re 75, it’s the question should they?

With pension poverty rising it has already seen some elderly people feel they have no choice but to return to work. The CSJ just want to force it upon people.

It is important to note the the government responded to the backlash by saying it “has no plans to raise the retirement age to 75”, although if you ask the BackTo60 women, they’ll remind you that pension promises have be broken before.

We heading towards a society that works to the death, just so the government’s figures look good. And Iain Duncan Smith calls Jeremy Corbyn a totalarian. Maybe he should look in the mirror more often.

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