Delegates at Unison’s retired members’ conference were greeted with a shocking statistic. Nearly 1.9 million pensioners in the UK now live in poverty – an absolutely damning figure for the sixth richest country in the world.
Meanwhile, projections show that the problem is only set to get worse. So what’s the Department for Work and Pensions (DWP) doing about this? Gathering evidence on raising the retirement age, of course.
Unison retired members’ conference
The retired members’ conference took place last week, down in Brighton. Over 300 delegates attended, out of the 167,000 members of Unison’s retiree branch. The union has stated that the conference stands testament to the fact that trade union values don’t stop at retirement.
This year’s conference kicked off with a panel discussion on pensioner poverty. The speakers included Glyn Jenkins, UNISON’s head of pensions; Morgan Vine, of the charity Independent Age; Neil Duncan-Jordan, independent MP for Pool; and Jack Jones from the Trades Union Congress (TUC).
Along with the shocking number of pensioners enduring poverty, the panel also discussed potential solutions. These included strategies to tackle high housing and energy costs, as well as pre-emptive measures like addressing low pay while people are still in work.
A growing issue
The new version of the full state pension, awarded to those who retired after 2016, comes to £11,973 a year. For anyone who retired before that date, the core component of the old state pension pays out just £9,175 a year.
Britain uses a ‘triple lock’ system for its pension payouts. This means that pensions rise each year by 2.5%, unless inflation or wage growth is higher than that amount. In that case, pensions go up by whichever number is greatest.
According to research by the Joseph Rowntree Foundation, a pensioner living on their own would need £17,400 a year just to reach basic living standards. This means that many older retirees are more than £8,000 short of being about to support themselves.
Unfortunately, without immediate action, the issue of pensioners living in poverty is only going to get worse as time goes on. Analysis from Pensions UK suggests that, by 2040, almost 3 million pensioners will no longer receive enough money to cover their basic needs.
Currently, the state pension accounts for £140bn of the public spending budget every year. The Office for Budget Responsibility (OBR) has stated that the cost of the state pension could rise to £200bn by 2073.
The figure is being driven upwards along with the average age of the population, as people are living longer and having fewer children. Coupled with that is the fact that the original creators of the triple lock didn’t reckon with the ballooning inflation levels that we’ve seen in recent years. This means that the state pension is costing almost three times as much as the original predictions suggested.
State pension review
Currently, the government is collecting for evidence for an independent report ahead of an official review of the state pension age. The Pensions Act 2014 means that the government has to review State Pension age at least once every six years.
According to the current timetable, the state pension age will rise to 67 between 2026 and 2028. Then, sometime between 2044 and 2046, it will rise again to 68.
The DWP has appointed Dr Suzy Morrissey of the Pensions Policy Institute to prepare the report. It will examine factors like:
the potential benefits of linking pension age to life expectancy.how state pension age affects the sustainability of the state pension plan.the merits of different automatic adjustment mechanisms for pension age from around the world.
The closing date for written responses to the pension age report is 24 October 2025. You can find out more details at this address, or send written responses to Independent.StatePensionAgeReport@dwp.gov.uk.
Featured image via Unsplash/Jose Antonio Gallego Vázquez
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