Key points

  • Until the last few years, the proportion of pensioners living in low-income households had been falling sharply, from 29% of all pensioners in 1998/99 to 17% in 2005/06.  There was, however, no further reduction between 2005/06 and 2008/09.
  • The fall has been particularly sharp for single pensioners: 18% of single pensioners are now in low-income households compared with 37% a decade ago.  The proportion of pensioner couples in low income has also fallen, but more slowly, from 22% to 15%.
  • As a result of the falls, pensioners are now less likely to be living in low-income households than non-pensioners – their rate being lower than for all other family types except for working-age couples without dependent children.
  • Single female pensioners are more likely to be in low income than either single male pensioners or pensioner couples.
  • Pensioners aged 75 and over are more likely to live in low-income households than younger pensioners.  This is not, however, because the risks of low income for single pensioners rise with age.  Rather it is because of a combination of a) the proportion of pensioners who are single rises with age and b) the risks of low income for pensioner couples rises with age.
  • Around half of the pensioners in low income are in pensioner couples and the other half are single pensioners.
  • Unlike working-age adults, relatively few low-income pensioners have a very low income (below 40% of median household income).  Part of the reason for these differences can be seen looking at how out-of-work benefit levels compare with the low-income thresholds for different family types (see the indicator on benefit levels)
  • Inner London has a much higher proportion of working-age adults in low-income households than any other region (29% compared with an average for the United Kingdom as a whole of 18%).
  • All the points above use the same low-income threshold as that used elsewhere and are therefore after deducting housing costs.  However, because many older people own their homes outright, they often have very low housing costs.  Such people, even if not in low income using the ‘after deducting housing costs’ measure, are sometimes in low income using the alternative ‘before deducting housing costs’ measure.  After deducting housing costs, as discussed above, pensioners are now less likely to be in low income than non-pensioners.  Before deducting housing costs, however, pensioners are more likely to be in low income than non-pensioners.

Why this indicator was originally chosen

Although pensioners on average enjoy better incomes than they have in the past, this rising average conceals a large minority who have no additional resources other than the state retirement pension and means tested benefits.

Definitions and data sources

The first graph shows the risk of a pensioner being in a low-income household (defined as the proportion of people with incomes below 60% of median household income after deducting housing costs), with the data shown separately for single pensioners and pensioner couples.

The second graph shows how the risks have changed for people in different family types, including pensioners.  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 the proportion of pensioners living in low-income households for different combinations of age group (less than 75 and 75 & over) and family type (pensioner couple, single female pensioner and single male pensioner).

The fourth graph shows the share of the pensioners living in low income for different combinations of age group and family type.

The fifth 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 sixth graph shows the risk of pensioners being in low-income households by region.

All the graphs above use the same low income threshold as that used elsewhere and are therefore after deducting housing costs.  However, because many older people own their homes outright, they often have very low housing costs.  Such people, even if not in low income using the after deducting housing costs measure, are sometimes in low income using the alternative before deducting housing costs measure.  This issue is explored in the seventh graph which compares the proportions of single pensioners, pensioner couples and non-pensioners who are in low-income households using both the after and before deducting housing cost measures.

The data source for all the graphs is Households Below Average Income, based on the Family Resources Survey (FRS).  For 2002/03 onwards, the data relates to the United Kingdom whilst the data for earlier years is for Great Britain (FRS did not cover Northern Ireland until 2002/03).  Income is disposable household income after deducting housing costs and the low-income threshold is the same as that used elsewhere, namely 60% of contemporary median household income (the two exceptions being the fifth graph, where the 40% and 50% thresholds are also shown, and the seventh graph where the results before deducting housing costs 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 map shows how the number of people in receipt of the guaranteed part of Pension Credit (previously called the Minimum Income Guarantee) as a proportion of the pensionable-age population varies by super output area.  The data is for February 2009.  The data source is the DWP Work and Pensions Longitudinal Study.

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

Relevant 2007 Public Service Agreements

Overall aim:  Tackle poverty and promote greater independence and well-being in later life

Lead department

Department for Work and Pensions.

Official national targets


Other indicators of progress

Employment rate age 50-69: percentage difference between this and overall employment rate.

Pensioner poverty.

Healthy life-expectancy at age 65.

Over 65s satisfied with home and neighbourhood.

Over 65s supported to live independently.

Previous 2004 targets

By 2008, be paying Pension Credit to at least 3.2 million pensioner households.  While maintaining a focus on the most disadvantaged by ensuring that at least 2.2 million of these households are in receipt of the Guarantee Credit.

The numbers

Graph 1

Year Pensioner couples Single pensioners All pensioners
1994/95 22% 36% 28%
1995/96 23% 35% 28%
1996/97 22% 39% 29%
1997/98 22% 38% 29%
1998/99 22% 37% 29%
1999/00 22% 35% 28%
2000/01 21% 33% 26%
2001/02 22% 30% 26%
2002/03 22% 27% 24%
2003/04 19% 23% 21%
2004/05 17% 19% 18%
2005/0616% 19% 17%
2006/0717% 21% 19%
2007/0816% 21% 18%
2008/0915% 18% 16%

Graph 2

Family typeAverage of 1996/97 to 1998/99 Average of 2006/07 to 2008/09
Working-age couples without dependent children10% 12%
Working-age singles without dependent children23% 25%
In working-age couples with dependent children 23% 23%
In working-age singles with dependent children 63% 50%
Single pensioners38% 20%
Pensioner couples22% 16%

Graph 3

Age group In pensioner couples Single women Single men All pensioners
Aged 60/65 to 7415% 21% 16% 16%
Aged 75+ 18% 22% 16% 20%

Graph 4

Group Number Proportion of total
Single pensioners aged 60/65 to 69 270K 14%
Single pensioners aged less than 70 to 79 300K 15%
Single pensioners aged 80 and over 350K 18%
In pensioner couples aged 60/65 to 69450K 23%
In pensioner couples aged less than 70 to 79 410K 21%
In pensioner couples aged 80 and over 180K 9%

Graph 5

Millions of people
Family type Below 40% of median40-50% of median50-60% of median
In working-age couple families with dependent children2.0M 1.2M 1.4M
In working-age families without dependent children2.2M 0.9M 0.9M
In lone parent families0.8M 0.8M 0.9M
In pensioner families0.7M 0.6M 0.9M

Graph 6

East Midlands20%
inner London29%
outer London20%
North East18%
North West17%
Northern Ireland22%
South East16%
South West17%
West Midlands16%
Yorkshire and The Humber19%

Graph 7

Type of thresholdIn pensioner couples Single pensionersNon- pensioners
After deducting housing costs16% 20% 23%
Before deducting housing costs19% 26% 17%