David Prosser: How to tackle pensioner poverty

Thursday 28 January 2010 01:00
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Outlook Good news and bad from the Office for National Statistics on the topic of pensioner poverty. The number of older people in poverty fell by a third over the 10 years to 2008 (the most recent period for which data is available), but 2 million pensioner households are still living below the breadline.

This Government seems to be committed to the idea that means-tested benefits – especially tax credits – are the route to lifting families and pensioners out of poverty. This is the legacy of Gordon Brown's lengthy tenure at 11 Downing Street, and nothing has changed since he moved next door.

In the case of pensioners, however, the policy does not seem to be having the desired effect – at least not quickly enough. The pension credit and the minimum income guarantee, which see the basic state pension topped up for households on incomes below a certain level, are so complicated that many people are not able to claim what they are owed. Many more pensioners simply refuse to even make a claim.

Taking a million pensioners out of poverty is an achievement of which the Government can justifiably be proud. However, it is only a start, and if ministers want to begin making inroads into those still living in poverty, they will need to rethink the means-testing system.

What's particularly odd about this obsession with means-testing is the willingness of the Government to embrace universal benefits in certain specific circumstances. For example, the winter fuel allowance – worth £250 this year, but sometimes much more – sticks out like a sore thumb. It is paid to all households, whatever the wealth of the occupants, and many of those who get it simply do not need the money.

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