Older people in low income

Graphs on this page:

Supporting information:

Key points

  • The proportion of pensioners living in low-income households (using the low-income threshold of the 60% of median income after deducting housing costs) has been falling, from an average of 26% of all pensioners in the years 1996/97 to 1998/99 to an average of 18% in the years 2006/07 to 2008/09.
  • Pensioners are now much less likely to be living in low income than non-pensioners.
  • The one in five pensioners who are in low income compares to half of all people in lone parent families.
  • Similar proportions of single pensioners and pensioner couples are in low income.
  • The proportion of pensioners in low income in Wales is similar to the United Kingdom average: 18% compared with 18%.  It is higher than in six of the English regions plus Scotland and lower than in the other three English regions plus Northern Ireland.
  • Unlike working-age adults, relatively few low-income pensioners have a very low income (below 40% of median household income).
  • People in receipt of guaranteed Pension Credit is the best indicator available for the geographic distribution of low income among pensioners.  More people are in receipt of guaranteed Pension Credit in The Valleys than elsewhere (except for Torfaen) but the differences are much less than for working-age people in receipt of out-of-work benefits (see the indicator on the location of low income).

Definitions and data sources

The first graph shows the risk of a pensioner being in a low-income household.  For comparison purposes, the equivalent data for Great Britain as a whole is also shown.

The second graph shows the risks of being in low income for people in different family types.  Note that a couple (and therefore both of its adults) is classified as a pensioner couple if either of the adults is of pensionable age.

The third graph shows, by family type, the number of people living in low-income households.  For simplicity reasons, some of the family types from the second graph have been grouped together.  Note that working-age adults living with a pensionable-age spouse are counted in the pensioner family type.

The fourth graph shows how the risk of pensioners being in low-income households in Wales compares with the rest of the United Kingdom.

The data source for the first four graphs is Households Below Average Income, based on the Family Resources Survey (FRS).  Income is disposable household income after deducting housing costs and the low-income threshold is the same as that used elsewhere, namely 60% of British contemporary median household income (with the exception of the third graph, where the 40% and 50% thresholds are also shown).  The data is equivalised (adjusted) to account for differences in household size and composition.  Note that in 2007 DWP made some technical changes to how it adjusted household income for household composition (including retrospective changes) and, as a result, the data is slightly different than previously published figures.  The averaging over three-year periods has been done to improve statistical reliability.

The fifth graph shows, for the month of February in the latest year, how the proportion of people aged 60 and over in receipt of the guaranteed part of Pension Credit varies by local authority.  The map shows the same data but by super output area and using the number of people of pensionable age as the denominator (estimates of the numbers of people aged 60 and over not being available at a super output area level).  The data source is the DWP Work and Pensions Longitudinal Study.  ONS population estimates have been used to calculate the proportions.

Overall adequacy of the indicator: high.  The FRS is a well-established annual government survey, designed to be representative of the population as a whole.  However, since it only covers people living in private households, and not residential institutions (such as nursing homes), it does leave out a significant group of older people.

External links

See the DWP sites on Pension Credit and Winter Fuel Payments.