Incomes of poorest pensioners have been falling behind, says IFS

Researchers said some people are not claiming the benefits they are entitled to, such as pension credit.

The gap between the poorest pensioners and those on average incomes has been widening in recent years (Yui Mok/PA) (PA Archive)

The gap between the poorest pensioners and those on average incomes has been widening in recent years, according to the Institute for Fiscal Studies (IFS).

Pensioner incomes increased much faster than incomes of working age people from the early 2000s until 2011, the IFS said.

From 2002 to 2011, average pensioner incomes grew by 22%, while average working-age incomes fell by 3%.

The IFS said incomes of both pensioners and those of working age increased by 12-13% between 2011 and 2022.

But over the same period, incomes among the poorest 10% of pensioners increased by 5% – meaning the gap between poorer pensioners and those on average incomes widened, according to the research, funded by the Joseph Rowntree Foundation (JRF).

This report highlights more needs to be done to address the low take-up of pension credit

Peter Matejic, Joseph Rowntree Foundation

Poorer pensioners have fallen behind since 2011 in part because they have not benefited from the increases in private pension incomes, nor growth in employment incomes, that have boosted incomes for middle-income pensioners and working age people respectively, the IFS said.

Anna Henry, a research economist at the IFS, said: “Reductions in pensioner poverty seen before 2011 have gradually gone into reverse.

“The new Government will need focus on current and future challenges for pensioner incomes, especially those of low income pensioners, and not assume that everything will always be getting better.”

Peter Matejic, JRF chief analyst, said: “Ministers should note that this report highlights more needs to be done to address the low take-up of pension credit which acts as a brake on its power to reduce pensioner poverty.

“This is a problem across the benefits system, with many people not claiming support they are entitled to. There is no good reason more can’t be done to educate and inform people about their entitlement, as well as to simplify the application process.”

A DWP spokesperson: “Ensuring a better deal for the pensioners of today and tomorrow is a priority for this government.

“We have committed to the Triple Lock and are promoting Pension Credit and its benefits such as help with heating costs to protect pensioners on the lowest incomes.”

People can find out more about pension credit and their potential eligibility at www.gov.uk/pension-credit