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New research shows how to reduce pensioner poverty
New research from Age UK and the Pensions Policy Institute maps out the fastest way to reduce pensioner poverty by projecting the effect different government policies will have on older people.
One in six pensioners (1.8 million) still live in poverty and although numbers have been falling over the last three decades in the UK, figures show that since 2005 levels have remained steady. The PPI research shows that if the current policies remain in place including the 'triple lock' guarantee then the percentage of pensioners living in poverty will fall to 14% in 2017 and 11% by 2025.
Government proposals for a single tier state pension for future pensioners would cut pensioner poverty rate to 10% by 2025. However, other policies changes would be effective in reducing poverty rates much further – if the flat rate pension was introduced for all pensioners then the PPI predicts that the percentage living in poverty will fall to 9% in 2017 and 7% by 2025. Full take-up of means-tested benefits would also have a major impact bringing poverty down to around 6% by 2025 but is very hard to achieve.
Michelle Mitchell, Charity Director of Age UK said:
'Despite being a wealthy country, an unacceptable number of people face a life of poverty. The triple lock is a great step forward for older people, but this research shows that the Government could reduce levels of pensioner poverty much faster through other changes such as introducing the flat rate pensions for all.
'The current pension system is bewildering in its complexity and many older people do not claim the means-tested benefits they are entitled to. We welcome Government proposals for a flat rate pension which is likely to reduce poverty over time and encourage saving for retirement by making it clear what you can expect to receive from the state. However, it is essential that the Government also introduces reforms to help current pensioners.'