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MP’s report condemns poverty pensioners face

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Issue 1709

Fancy living on 70 a week?

MP’s report condemns poverty pensioners face

THE LABOUR-dominated Commons Select Committee on Social Security last week savaged the poverty level of pensions in Britain. It backed a basic income for pensioners of 90 a week-22.50 a week more than the present pension and 11.55 a week more than the benefit-assisted Minimum Income Guarantee.

In truth, 90 a week is still very low. But it is far in excess of what New Labour has delivered. The select committee found overwhelming evidence of the suffering among older people and said that women, people from ethnic minorities and pensioners over 80 were particularly hard hit.

The report says, “The level of the basic state retirement pension and the level set by government as the trigger for means-tested assistance through income support are below the poverty lines.

“The Minister of State for Social Security was refreshingly honest about the inadequacy of the Minimum Income Guarantee level. Jeff Rooker admitted, ‘If you ask me could I live on 78.45 a week, no, I could not. I do not think that 78.45 is enough. It is the bottom. There is nothing lower than that’.”

The select committee was unsure how to define pensioner poverty but estimated that “over one in four pensioner households were living in poverty in 1997-8, in the region of 2.75 million households. The National Pensioners’ Convention gave evidence to the committee. It said that half of all single pensioners had income after housing costs at best only a few pounds above Income Support levels.

The select committee says, “Work carried out by the Family Budget Unit (FBU) for Age Concern proposed that a single pensioner needs at least 90 a week and a couple 135 a week (plus rent and council tax) to avoid living in poverty. “An estimated 52 percent of single pensioners and 24 percent of couples had net incomes of less than these amounts. The evidence presented by the FBU and Age Concern made a strong impression on the committee.”

The government frequently uses the average for pensioners’ incomes. But the average is inflated by a small number of very well-off people at the top. As with the rest of society, the gap between rich and poor pensioners has widened massively in the last 20 years.

The report says, “Between 1979 and 1997 the incomes of pensioner couples in the top fifth of the income distribution rose by 80 percent. During the same period the income of pensioner couples in the bottom fifth increased by only 34 percent, much less than for society as a whole.” Pensioner poverty will also grow far worse unless the government changes tack. Social security minister Jeff Rooker told the committee that “by 2050 the value of the basic state pension will be worth, in today’s terms, 31 a week.”

Nobody could possibly live on that. So there will be more pressure to take out a private pension or to live on handouts and paltry benefits. Yet raising the pension to 90 a week would cost 8 billion a year-just a third of the amount Gordon Brown collected from the mobile phone auction earlier this year.

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