Understanding What Percentage of Pensioners in the UK Are Living in Poverty

According to the latest official data for 2023/24, 16% of pensioners in the UK were living in relative poverty after housing costs. This figure, representing nearly 2 million people, reveals a complex picture of financial insecurity in later life and directly addresses what percentage of pensioners in the UK are living in poverty.

Quick Summary

Official data for 2023/24 indicates 16% of UK pensioners were in relative poverty after housing costs. While income poverty has seen fluctuations, a rising cost of living has increased material deprivation. Demographic factors like housing tenure, age, and ethnicity affect who is most at risk, with solutions focused on addressing inadequate lifetime savings and boosting benefit take-up.

Key Points

• Prevalence: In 2023/24, 16% of UK pensioners lived in relative poverty after housing costs, equating to almost 2 million people.

• Defining Poverty: The official measure for pensioner poverty is having an income less than 60% of the median household income, calculated after deducting housing costs.

• Rising Costs: Despite a slight fall in income poverty, a significant rise in material deprivation indicates many pensioners are cutting back on essentials like heating and food due to rising living costs.

• Disproportionate Risk: Certain groups face a higher risk of poverty, including renters (private and social), older pensioners (85+), single women, and individuals from ethnic minority backgrounds.

• Key Causes: Factors contributing to pensioner poverty include inadequate state pension levels, insufficient private pension savings, the cost of living crisis, and low take-up of means-tested benefits.

• Available Support: Support is available through government schemes like Pension Credit, which also provides access to other benefits, and charities such as Age UK.

• Lifetime Factors: Inequalities earlier in life, such as lower pay and career breaks for caring responsibilities, significantly impact an individual's financial security in retirement.

Understanding Pensioner Poverty in the UK

Pensioner poverty is officially measured by the government's Households Below Average Income (HBAI) statistics. A key metric is relative low income (AHC), which identifies individuals in households with income below 60% of the median UK household income after housing costs. While long-term trends showed improvements, recent years have seen fluctuations and a rise in material deprivation, exacerbated by the cost-of-living crisis.

How is Pensioner Poverty Defined?

The official HBAI statistics provide several measures:

• Relative Low Income (AHC): Income below 60% of the current median, after housing costs.
• Absolute Low Income (AHC): Income below 60% of the 2010/11 median (adjusted for inflation) after housing costs.
• Material Deprivation: Measures inability to afford basic necessities, showing a significant increase among pensioners recently.

Recent Trends in UK Pensioner Poverty

Pensioner poverty rates saw a period of decline followed by a rise after 2010. The latest official data for 2023/24 shows a slight decrease to 16% in relative poverty (AHC) from 18% in 2022/23. However, material deprivation remains a significant concern, with many pensioners struggling to afford essentials.

Who is Most at Risk? The Demographics of Pensioner Poverty

Certain groups are disproportionately affected by pensioner poverty:

• Housing Status: Renters, particularly private and social renters, have significantly higher poverty rates compared to owner-occupiers.
• Age: Older pensioners, especially those 85 and over, face higher risks.
• Gender and Marital Status: Single pensioners, especially women, are more vulnerable.
• Ethnicity: Individuals from ethnic minority backgrounds face a higher risk.
• Disability: Disabled pensioners are at greater risk due to higher costs and lower lifetime earnings.

Key Drivers of Pensioner Poverty

Factors contributing to pensioner financial insecurity include:

• Inadequate Lifetime Savings: Many lack sufficient private pensions, relying heavily on the state pension.
• State Pension Levels: For some, the state pension alone is not enough to cover basic living costs.
• Benefit Non-Take-up: Many eligible pensioners do not claim means-tested benefits like Pension Credit.
• Housing Costs: Rising rents are a major challenge for pensioner renters.

Comparison of Pensioner Relative Poverty by Housing Tenure (2022/23)

Housing Tenure	Relative Poverty Rate (After Housing Costs)
Owner-Occupier	12%
Social Rented	34%
Privately Rented	38%

Source: Centre for Ageing Better analysis of DWP Households Below Average Income data for 2022/23

Addressing Pensioner Poverty: Available Support

Support for financially struggling pensioners includes:

• Pension Credit: A means-tested benefit to top up income and provide access to other support.
• Charitable Assistance: Organizations like Age UK offer advice and support.
• Local Council Support: Emergency help may be available through local schemes.

Conclusion: A Multi-faceted Challenge

What percentage of pensioners in the UK are living in poverty is influenced by economic factors, policy, and individual circumstances. While income poverty rates have seen some recent improvement, the rise in material deprivation highlights ongoing financial pressures. Demographic factors significantly impact the risk of poverty. Addressing this issue requires a combination of government policy, efforts to increase benefit take-up, and support from charities to ensure a dignified retirement for all.

Further information and analysis on this topic can be found in the Age UK briefing, poverty and financial disadvantage in later life briefing 2024.

Frequently Asked Questions

What is the most recent percentage of pensioners living in poverty in the UK?

According to the Department for Work and Pensions data for 2023/24, 16% of UK pensioners are in relative poverty, measured after housing costs. This represents a slight decrease from the 18% figure in 2022/23 but highlights persistent financial difficulties.

How is pensioner poverty officially measured in the UK?

The official measure uses Households Below Average Income (HBAI) statistics. A pensioner is considered to be in relative poverty if their household income is below 60% of the median household income, after deducting housing costs (AHC).

Has pensioner poverty increased or decreased recently?

The proportion of pensioners in poverty has fluctuated. After falling significantly in the early 2000s, it started to rise again after 2011, reaching around 18% in 2021/22. The 2023/24 figure of 16% represents a slight dip, though underlying financial pressures remain high.

Which groups of pensioners are most likely to be in poverty?

Certain groups are at a higher risk. Renters (both private and social) have significantly higher poverty rates than owner-occupiers. The oldest pensioners (85+) and single women also face disproportionately higher poverty levels.

What is material deprivation, and how does it relate to pensioner income?

Material deprivation measures a household's inability to afford key essentials for a minimum socially acceptable standard of living. Despite fluctuations in income poverty rates, material deprivation rose significantly between 2019/20 and 2022/23, showing that many poorer pensioners are still struggling to meet basic needs.

Why do some eligible pensioners not claim the benefits they are entitled to?

Reasons for low benefit take-up among pensioners include a lack of awareness of entitlements, a reluctance to claim means-tested benefits due to perceived stigma, and the complexity of the application process. For example, estimates show that a large amount of Pension Credit goes unclaimed each year.

What support is available for pensioners on low incomes?

Pensioners on low incomes can apply for Pension Credit, which guarantees a minimum weekly income and unlocks access to other benefits like Housing Benefit and a free TV licence for those 75 and over. Charities such as Age UK also offer free advice and local support services.