A new report from Independent Age, the national charity supporting older people in financial hardship, projects a dramatic surge in poverty among the elderly by 2040 if current trends and policies remain unchanged.
The report, “Keys to the future: projecting housing tenure and poverty rates in later life,” commissioned by Independent Age and carried out by the UK Collaborative Centre for Housing Evidence (CaCHE), presents alarming findings about the future financial stability of the UK’s aging population.
The research projects that if poverty levels among those aged 65 and over continue to follow the trends observed since 2010, poverty among older people will rise from 17% to 23%, potentially increasing the number of older people living in poverty from 2.1m in 2022 to 3.9m by 2040.
Poverty rates for older women are expected to rise from 20% to 26%, due to factors such as the gender pay gap and career interruptions for caregiving. For older people with disabilities, poverty is projected to increase significantly from 18% to 29%, compared to a rise from 17% to 19% for their non-disabled counterparts.
Independent Age released this report ahead of its “Two Million Too Many” conference on 12 June 2024, aimed at highlighting the experiences of older people living in poverty. The charity urges political parties, businesses, and organisations to take collective action to prevent this projected increase in pensioner poverty.
Joanna Elson CBE, chief executive of Independent Age, commented on the findings: “Too many people currently experience financial hardship in older age, and the rocketing levels of poverty in later life that this research projects are bleak. It must be a wake-up call for decision makers across the UK.”
Elson highlighted the severe measures that nearly two million older people already living in poverty are taking to save money, such as skipping meals and not using heating. She said the situation is dire and poised to worsen, potentially affecting nearly one in four older people.
The report also shows a heightened risk of poverty among older renters, with projections showing the highest growth of poverty will be among private renters. Almost one quarter (24%) of older people will be living in rented accommodation by 2040. The proportion of those aged 65+ living in the private rented sector will triple from 4% to 13%. Poverty levels will be 61% for older private renters with a disability and 76% for older social renters with a disability. 14% of older women will live in the private rented sector, with more than half (54%) living in poverty.
Independent Age says unaffordability is a major issue for older private renters, with only 8.5% of the rental market affordable on Housing Benefit, despite recent uprates. The charity says Local Housing Allowance (LHA) adjustments are needed to keep pace with rental increases, which have risen 9.2% in the past year according to the ONS.
Elson added: “Older private renters are already at huge risk of being in poverty, often because their fixed income is eaten up by paying rent. Unless something is done, this research shows their number could increase even further.”
Rhiannon Williams, research associate at CaCHE, said: “Working with Independent Age on this research allowed us to cast light on the worrying upwards trends in precarious renting and income poverty among older people.”
