Government decisions on the state pension and means-tested and other benefits paid to pensioners will determine future levels of pensioner poverty according to a research report published today by the Pensions Policy Institute (PPI).
The report, The implications of Government policy for future levels of pensioner poverty, was commissioned by Age UK and projects future levels of pensioner poverty under the current state pension system and under a range of alternative Government policies. Policies considered in the research include changes to the level of existing means-tested and other benefits paid to pensioners and under the introduction of a single-tier state pension of £140 a week as proposed by the Government in a recent Green Paper.
Chris Curry, PPI Research Director said:
"Pensioner poverty has been falling over the last three decades in the UK. At its peak in 1989, 39% of pensioners lived in households with incomes below the relative poverty line of 60% of median income, after housing costs (AHC). By 2009 this had fallen to 16% of pensioners living in poverty, partly as a result of the previous Government's decision to introduce the Minimum Income Guarantee and its successor benefit Pension Credit."
"Assuming that current state pension policy continues and that the Government continues to index the Guarantee Credit to growth in average earnings, the percentage of pensioners living in households with income below the poverty line is projected to fall from 16% of pensioners in 2009 to 11% of pensioners by 2025."
"If the Government continues with current state pension policy but were to decide to index the Guarantee Credit to the Consumer Price Index instead of to average earnings then the percentage of pensioners living in households with incomes below the poverty line is projected to rise, from 16% of pensioners in 2009 to 19% of pensioners by 2025."
"The introduction of a single-tier state pension of £140 a week as set out by the Government in a recent Green Paper is projected to reduce the proportion of pensioners living in households with income below the poverty line from 16% of pensioners in 2009, to 10% of pensioners by 2025."
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