Have senior citizens never had it so good?
BBC Radio 4’s excellent fact-checking programme ‘More or Less’ this week answered a listener’s question about pensioners’ wealth. On ‘Politics Live’ on BBC2 last year, in a debate on the pension ‘triple lock’, the New Statesman Senior Associate Editor Rachel Cunliffe stated that as a pensioner “you’re more likely to be living in a millionaire household than you are to be living in poverty”. Is that true? The answer is ‘yes’.
The Government has decided that the triple lock should be retained. It guarantees that the state pension will rise by the highest of three measures: average earnings growth, inflation (according to the Consumer Prices Index) or 2.5%. That means that this year the state pension will increase by a whopping 10% (the rate of inflation).
Ms Cunliffe was using an Office for National Statistics (ONS) survey of household wealth 2016-18, but more recent data is similar. ‘Wealth’ includes the value of a house, private pension, annuity, shares, ISAs etc. as well as savings in cash. Given that many pensioners will have paid off their mortgage, it is not totally surprising that many pensioners qualify as ‘millionaires’.
More or Less reported that 22% of households headed by a pensioner had assets of £1 million or more. By another measure, 27% of pensioners live in millionaire households, whether or not they are the head.
On the other hand, how do you judge pensioner poverty? If your income, after taking housing costs into account, is below 60% of the median income, you are assessed as living in relative poverty. About 15% of pensioners are living in households below this relative poverty line. That is still 1.7 million people and the number has increased in the last 8 years, but it is well below the 30% in the mid-1990s. That does, of course, leave a lot of pensioners in the gap between the 27% of millionaires and the 15% in poverty.
It is, perhaps, unsurprising that a Conservative government, which relies heavily on the votes of older people, should want to avoid alienating pensioners by removing the triple lock, despite much pressure to do so. But a 10% increase in the state pension far exceeds the sort of annual pay awards to employees in the public sector. Add to this that pensioners, without any means test, can benefit from a senior rail card, free bus pass, free prescriptions and the winter fuel payment, it is not hard to see that the ‘silver economy’ has increased spending power as we all live longer.
It was interesting to see that in May 2022 Iceland introduced in its stores a once a week 10% discount on Tuesdays for over-60s. The retailer reports that it has made 8 million such discount transactions since the scheme launched. Indeed 630,000 customers used the saving in the first 4 weeks. Prospective Conservative parliamentary candidate, Richard Walker, who is also the Iceland chairman, will be pleased to see such a response amongst his party’s core support.
Pubs, restaurant chains and garden centres, such as Greene King, Hungry Horse and Dobbies, offer cut-price meal deals on the basis that seniors have more free time and more disposable cash to eat out.
Whilst not in any way downplaying the difficulties of those pensioners living in poverty, is too much attention being directed to a section of society which is relatively well-off? How many quite prosperous pensioners received the winter fuel payment and thought they did not really need it? How many retired people collect their free prescriptions and feel the money they save could be better used in the NHS?
It would be interesting to see whether any food retailers or food service providers could come up with imaginative initiatives aimed at other age groups struggling with the cost-of-living crisis, higher interest rates and the enormous difficulty getting on the housing ladder which so benefitted older generations. At the moment the focus of major retailers such as Tesco and Asda is to restructure store operations and cut jobs, disproportionately affecting those lower-paid workers who are suffering the most.
It is remarkable that the Chancellor of the Exchequer has recently reached out to people who left work during the pandemic with a message that the country needs them to return to the workplace to fill labour shortages and boost the economy. With sound financial security for many early retirees, that call may fall on deaf ears.