It’s happening again: elderly people suddenly getting poorer. Since the dawn of time, to be old was to be poor. Workhouses were abandoned not out of revulsion at their practices, but because virtually everyone in them became too old and sick to work. William Beveridge’s state pension was universal partly because many old people were too poor to be worth means-testing.
An under-heralded success of the Brown and Blair years was to lift so many older people out of poverty that by 2010, for the first time ever, pensioners were less likely to be poor than the rest of the population. Some still fell below the threshold, but the number was too small to tilt the statistics. Still, there’s no gratitude in politics, so it didn’t stop them voting Tory in ever greater numbers with each year of ageing. In 2019, 64% of over-65s voted Tory, compared with just 19% of under 24s. Age only became the strongest predictor of voting after 1980, when those two-thirds of older people turned less generous and redistribution-minded than older cohorts before them.
Mindful of that, the Tories showered pensioners with higher benefits while chopping support for the rest, especially children. A triple lock guaranteed the pension rose every year by whichever was highest – inflation, 2.5% or average wages. But no longer. The chancellor abolished the lock this year, assuming inflation was a temporary blip.
The Centre for Ageing Better’s annual report, published on 17 March, finds that there were 200,000 more poor pensioners in 2021. That means nearly one in five now fall below the official poverty threshold. The trend for working longer has gone into reverse: many older people lost their jobs during the pandemic, with their incomes plunging when they didn’t find new work.
Now add the shocking finding that life expectancy has gone into reverse, along with years of healthy life. Shocking too is the steep rise of 92,000 more pensioners trapped in private renting, most likely to be “non-decent” homes, as home ownership among older people falls. Sally West, Age UK’s policy manager, is appalled that some elderly people in need of money are selling their homes and renting instead: “a bad mistake”, she says.
But here’s the statistical tyranny of averages. Elderly people are most likely to be very rich too, as inequality between pensioners rises higher than among other generations. Since the 2008 crash, two-thirds of all the extra wealth created has gone to the over-65s, according to Prof Bobby Duffy, author of Generations. Insane property booms vastly enriched those who bought long ago, and over-50s, just a third of the population, do half of all consuming. While they’re cruising, young families are sinking.
Duffy shows inequality is greatest within generations, not between them, with wealth sealed by inheritance. The political question is how to persuade wealthy older generations to vote for the interests of young people, rather than only their own.
Maybe the government doesn’t much mind more old people joining the ranks of the poor, if they reckon they belong to the third of pensioners who don’t vote Tory. Here’s the government’s disgraceful dereliction. Pension credit, devised by Labour to stop old-age poverty, is a minimum income guarantee: that currently stands at a meagre £177.10 for a single person, but it takes them just over the poverty line. But a third don’t claim it, because they don’t know they’re owed it. Nor do they know of other benefits that come with it – help with rent, council tax, a free TV licence and an extra payment if they are carers. Ministers like to pretend it’s because they’re “proud”, but this is a scandal: every single one of those 1.3 million pensioners missing their credit could easily be found by the Department for Work and Pensions, as it already sends them their basic pension.
The DWP knows who those people are and where they live. DWP data is linked to HMRC, so the department could identify those too poor to pay any tax as a first step. It could knock on every door – or commission local Age UK groups and others to check every pensioner gets what they are owed.
But why would it do that? No doubt, next week’s budget will deliver a few modest mitigations for the great cost of living crisis, but if this chancellor bothered about the crisis happening in low-income households, he would never have cut the £20 a week uplift to universal credit. The 50 charities, Gordon Brown and more than 50 local council leaders writing to him this week all point to huge income losses for 9 million low-income families due to only raising benefits by 3.1%, not the real 7% inflation rate.
There is no need to pit one generation against another when it comes to poverty. Polling shows young people are remarkably generous in wanting to protect older people, according to Duffy. That’s far more than the other way round. The big question is how to lever some of the unearned wealth out of my lucky generation of home owners with old-fashioned work pensions, and redistribute it to whoever needs it, of whatever age. Maybe this news of growing pensioner poverty might make Tory-voting oldies more willing to shell out for the destitute of their own generation than they have been for the nation’s young.
Polly Toynbee is a Guardian columnist
