Despite this, many people still struggle with low incomes in retirement and poverty levels among the elderly was recently examined in a House of Commons Library briefing paper.
Produced on April 9, this report made international comparisons to the UKs pensions system and an entire section was dedicated to pensioner poverty.
Roderick McInnes, the writer of the report, began by examining the most recent data from the OECD: “The OECD uses a common set of statistical conventions to measure incomes consistently across countries to determine the proportion of the pensioner population in each country living in relative income poverty (defined as having incomes less than 50 percent of the median).
For the whole UK population, they reached 11.7 percent.
It should be noted that in the “top 10” countries, only four came from the EU.
Roderick went on to compare these figures to data from the DWP: “The OECD’s figures for the UK differ from the DWP’s own measure of households in relative low income, published in the annual Households below average income (HBAI) publication.
“According to HBAI, the percentage of pensioners in the UK living in households with income below 50 percent of the median equivalised net household income was 9.8 percent in 2018/19 and 11.1 percent in 2019/20.
“Discussions of relative low income in the UK usually focus on the proportion of people living below 60 percent of the median income after housing costs – 15.9 percent of pensioners were living below this benchmark in 2018/19 and 18.1 percent in 2019/20.”
Unfortunately, the economic shock of coronavirus is set to make some of these issues worse, as recent analysis from Close Brothers revealed older workers are already dealaying their retirements as finances took a hit.
In Close Brother’s “Expecting the unexpected: a spotlight on preparing for a crisis” report it was shown that nearly one in five (19 percent) employees aged between 65-74 have delayed their retirement as a result of the pandemic, with 14 percent of 55-64 year olds also making the same decision.
In looking at the entire workforce as a whole, the report detailed 19 percent of workers in large organisations said explicitly they were financially unprepared for the pandemic, with younger workers being hit particularly hard.
Jeanette Makings, the Head of Financial Education at Close Brothers, commented on the results and reflected on what needs to be done moving forward: “The COVID-19 pandemic risks being a ‘sliding doors’ moment for UK employees and their employers.
“It has impacted financial health in a multitude of ways, with some suffering hardship, some having to postpone long held plans and others benefitting and adding to savings.
“At the forefront of those best able to help employees improve their financial health are their employers; they are trusted, they can reach large numbers of people via the workplace, they already offer rewards and benefits that can be used to improve financial wellbeing and both employee and business performance will benefit from improved financial health.
“Understanding employees financial health as a whole, and knowing those that need most help, has to be the starting point to ensure that an inclusive, effective, and targeted financial wellbeing programme is implemented. A single channel, ‘one size fits all’ financial wellbeing approach is likely to fail many.”