Page last updated at 23:49 GMT, Wednesday, 29 July 2009 00:49 UK

Pensioner poverty 'unacceptable'

Elderly man sitting by fire
One in five pensioners in the UK are classed as living in relative poverty

It is "unacceptable" that two million pensioners in the UK are still living in poverty, a group of MPs says.

The Work and Pensions Committee says the figure is a third lower than it was in 1997, but wants ministers to commit to ending pensioner poverty altogether.

It is also calling for the benefits system to be simplified for older people and the compulsory retirement age of 65 to be scrapped.

The government said it recognised there was "more to do".

One in five pensioners in the UK are classed as living in relative poverty.

Most vulnerable

The complexity of the benefits system was cited as a key cause of poverty, with some 1.7m older people failing to claim money to which they are entitled.

The committee said it must be simplified, particularly for claiming pension credit, which offers an income top-up of at least £120 a week to everyone over 60.

While no pensioner should be expected to work after 65, many would like to
Work and Pensions Committee

The allowance given to pensioners in residential care should also be increased, MPs said, from the current £21.90 to £40 "to allow them to live fulfilled lives".

Committee chairman Terry Rooney said: "The government has committed to eradicating child poverty, now they need to commit to eradicating pensioner poverty.

"Many government strategies have worked well in the past, but are now showing diminishing returns."

Mr Rooney said people planning for retirement needed "far more advice" on "everything from how much they need to save, life styling, annuities, and how to change their electricity supplier".

Therefore, the government's proposed "one stop shop" for older people must be set up urgently and marketed well.

A single phone line to allow people to easily claim all the benefits they are entitled to was also recommended.

The committee also stressed the need to urgently abolish the default retirement age, saying it was "bad for society, bad for older people, and bad for the economy".

"While no pensioner should be expected to work after 65, many would like to," it said, and those who do must also be protected from age discrimination.

The current economic downturn threatens to condemn older people to "a life of poverty in retirement" unless action is taken to avoid the experience of previous recessions, when many in their 50s lost their job and never worked again, it added.

'Difficult times'

Responding to the report, Pensions Minister Angela Eagle said more than 900,000 pensioners had been lifted out of poverty since 1997.

Older people should be able to live with dignity in retirement
Andrew Harrop
Age Concern and Help the Aged

But she said the government would study the recommendations in detail, adding: "We recognise there is more to do, which is why even in these difficult economic times, we have targeted an extra £4bn to helping our pensioners this year."

Andrew Harrop, head of public policy at Age Concern and Help the Aged, said pensioner poverty had remained "stubbornly high for the past four years".

"Working to end pensioner poverty once and for all should be a real focus for both this government - and for the next," he said.

"Older people should be able to live with dignity in retirement, not be forced to scrimp and save."

Dot Gibson, general secretary of the National Pensioners' Convention, said: "The select committee report dishes out some good advice, but its 'solutions' are more of the same.

"A simple and logical solution to lift pensioners out of poverty would be to bring in a living state pension."

Earlier this week, figures showed that the UK had the fourth highest rate of pensioner poverty in Europe, behind countries like Romania.

Shadow work and pensions secretary Theresa May that "under Labour pensioner poverty has remained stubbornly high".

"Due to the complexity and bureaucracy of the government's benefits system, 1.7m pensioners are not claiming the benefits they are entitled to."

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