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UK pushed 100,000 people into poverty by lifting pensio...

Business Maverick

Business Maverick

UK pushed 100,000 people into poverty by lifting pension age

WALSALL, ENGLAND - SEPTEMBER 08: A pensioner holds his walking stick on September 8, 2014 in Walsall, England. Britain is facing multiple problems stemming from an increase in the elderly proportion of its population, including increasing health care costs, strains on its social security system, a shortage of senior care workers and challenges to the employment market. (Photo by Christopher Furlong/Getty Images)
By Bloomberg
20 Jun 2022 0

Britain raised its state pension age to 66 from 65 between late 2018 and the end of 2020. That meant about 700,000 people on the brink of receiving benefits missed out on income of about £142 ($174) a week.

The UK’s decision to raise the age at which people can claim pension benefits pushed almost 100,000 more people into poverty – one-in-seven of those affected by the change.

The finding, in a study by the Institute for Fiscal Studies and the Centre for Ageing Better, puts pressure on the government to extend the social safety net for those who are hit hardest.

It showed that people with lower levels of education and living in rented accommodation were most likely to suffer the biggest living standards decline and adds to broader concerns about a cost-of-living squeeze on household incomes.

“These statistics are shocking and show that the number of 65-year-olds in absolute poverty rose from one-in-10 before the state pension age increased to almost one-in-four just two years later,” said Emily Andrews, deputy director of the Centre for Ageing Better.

Britain raised its state pension age to 66 from 65 between late 2018 and the end of 2020. That meant about 700,000 people on the brink of receiving benefits missed out on income of about £142 ($174) a week.

About 9% of those people, or 60,000, decided to stay in their jobs longer. The government saved about £4,9 billion a year as a result of the change through higher tax revenue and lower benefit payouts, which is about 5% of annual government spending on pensions, the IFS said.

“Increasing the state pension age is a coherent government response to increasing life expectancy,” said Laurence O’Brien, research economist at the IFS. “But it does weaken household budgets.” BM





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