Fifth anniversary of means-tested benefit is nothing to celebrate

Britain’s biggest pensioner organisation, the National Pensioners Convention (NPC), has marked the fifth anniversary of the introduction of the means-tested Pension Credit by highlighting its failure to reach the very poorest older people.

The latest official figures from the Department for Work and Pensions[1] reveal how ineffective the Pension Credit has been at tackling pensioner poverty:

• There are up to 1.8m pensioners who are eligible, but do not receive the Pension Credit (ENR - eligible non-recipients). This represents a take-up rate of between 59%-67% - significantly below the government’s stated target of 73%.

• 35% of these individuals (ENRs) are aged 80 or over.

• 67% of the 1.8m pensioners (ENRs) are living on incomes below the official poverty level. In total, 2.5m pensioners in Britain are said to be living in poverty.

• Up to £1.3bn in Pension Credit goes unclaimed.

• The Pension Credit take-up rate is the lowest in the East Midlands, London, the North West, South West and Wales where the number of pensioners who are eligible but don’t claim is higher than those actually receiving the benefit (see table below for regional breakdown).

The DWP study also offers a number of reasons as to why pensioners are reluctant to make a claim. These include:

• Feeling that the process of claiming is demeaning

• Being unaware of the rules and/or a belief that they are ineligible to claim

• An unwillingness to disclose personal information

• A complicated and off-putting claiming process

Dot Gibson, NPC vice president said: “When Gordon Brown was in opposition in 1993, he claimed he wanted to be the first Labour chancellor to end the means-testing of Britain’s elderly, yet he has been the architect behind the biggest expansion of means-testing of pensioners since WWII. After five years, the Pension Credit still fails to reach 2m of the country’s poorest older people – because they are unwilling to take part in what they see as a demeaning process. It’s time the government realised that pensioners and means-testing simply don’t mix. What older people want is an end to means-testing and a decent state pension which is set above the poverty level of £151 a week and rises each year in line with earnings.”

ENDS

For more information contact Neil Duncan-Jordan on 07940-357-608

Prime Minister’s warm words not matched by action

Britain’s biggest pensioner organization, the National Pensioners Convention (NPC), has criticized the prime minister’s speech at the Labour party conference today, as being strong on rhetoric but weak on action.

Commenting on the prime minister’s speech, Joe Harris, NPC general secretary said: “Mr Brown is right to call an ageing population a blessing rather than a burden, but his speech still lacked any date as to when he was going to restore the state pension link with earnings. Whilst he said no-one should live in fear of old age, he has refused to give an immediate increase in the winter fuel allowance and his commitment to better social care will be meaningless if it does not include an end to means-testing. He had lots of warm words but very little action.”

ENDS

For further information contact Neil Duncan-Jordan on 07940-357-608

Inflation rise will force more older people into poverty

Britain's biggest older people's organisation, the National Pensioners Convention (NPC), claims that millions of older people are now on the brink of poverty, following the latest figures released today showing a further increase in inflation.

The official poverty figures show that 2.5m (23% of the pensioner population) are living on less than £151 a week. Up to 61% of all pensioner couples have an annual income of £15,000, whilst 45% of all single pensioners live on just £10,000 a year.

Between 1997 and 2006, the number of people living in severe poverty – defined as living on less than 40% of median population income – increased by 600,000. The poorest quarter of pensioner households saw their incomes rise by less than 1% last year, well below inflation. The poorest single pensioners saw their real incomes drop by 4%.

Joe Harris, NPC general secretary said: “Nearly three million pensioner households already spend over 10% of their income on energy and are living in fuel poverty. If you add onto household bills things like food and council tax, millions more older people could be using as much as 70% of their income just to keep their house warm and eat a decent meal[i]. That doesn’t leave very much at the end of the week to enjoy life.”

“The real reason pensioners are suffering is because they spend a higher proportion of their income on those items that are rising fastest – whilst the purchasing power of their state pension continues to decline. It’s a shocking indictment of the government’s pensions’ policy that the number of older people in poverty is higher now than five years ago and things look set to get worse. It’s time the government used the growing surplus in the national insurance fund to pay everyone a decent pension above the poverty line of £151 a week that rises every year in line with the greater of inflation or earnings. In light of the current increases in the costs of living – pensioners simply cannot afford to survive.”
 

 ENDS 

For more information contact Neil Duncan-Jordan on 07940-357-608

1 in 3 of future pensioners face poverty in retirement 

Britain's biggest older people's organisation, the National Pensioners Convention (NPC), has claimed that today's Scottish Widows’ survey showing that 1 in 3 people cannot afford to save for their retirement, is further evidence that the government’s pensions’ policy is beginning to unravel. 

Joe Harris, NPC general secretary said: "Most financial experts agree that you need a pension pot of about £100,000 to provide an income in retirement of around £6000 a year, but millions of today’s workers – even those in occupational pension schemes – will not get anywhere near that amount. The government’s entire pensions’ policy has relied on means-tested benefits and good company pensions to take people out of poverty in retirement – but this approach is now beginning to unravel. A third of pensioners will still be means-tested in 2050 and good company pension schemes are becoming a thing of the past.” 

“The latest figures show that 1 in 4 pensioners already live below the poverty line of £151 a week – 62% of pensioner couples get by on £10,000 or less each year and it looks as if future generations will be even worse off than their parents and grandparents. Rising fuel, food and council tax bills are pushing people further into financial hardship, yet the government’s answer to this looming pensions’ crisis is to tell people to work longer, by raising the age of retirement to 68.” 

“A strengthened national insurance based state pension set above the poverty level and linked to earnings offers the most effective way of giving everyone – both now and in the future – real financial security and dignity in retirement.” 

ENDS

For further information contact Neil Duncan-Jordan on Tel: 07940-357-608 

Notes to Editors 

• The National Pensioners Convention and the trade union movement are staging the first ever lobby of parliament on 22 October 2008 to focus on the need for a decent state pension for both today’s and tomorrow’s pensioners. Further details available on www.npcuk.org

Equality Bill marks beginning of the end of age discrimination 

Britain’s biggest pensioner organisation, the National Pensioners Convention (NPC), has welcomed the publication of the Equality Bill today, but has called for more practical measures to change attitudes towards the older population. 

Pat Healy, NPC vice president said: “Having equality on paper is a major step towards tackling age discrimination in society, but putting that into practice is going to be much harder to achieve. The devil will be in the detail of the bill and with a possible delay of up to five years before this legislation takes effect, millions of older patients, travellers and tenants will remain second-class citizens.” 

“Until such time as society changes its attitude towards growing older, we have a right to ask who is going to stop the doctor making a decision based on age rather than clinical need? Who is going to prevent the insurance company from denying travel insurance to someone over 80 and who is going to ensure that society doesn’t continue to regard older people as a burden rather than a resource?” 

“When the cabinet has a proportion of older people serving in it and pensioners are given proper economic power through a decent state pension, then we’ll know that ageism has really been consigned to the dustbin of history.” 

ENDS 

For more information contact Neil Duncan-Jordan on Tel: 07940-357-608

Energy price rises will push 1.6m pensioners into fuel poverty 

Britain's biggest older people's organisation, the National Pensioners Convention (NPC), has claimed that today's announcement that energy bills may rise later in the year by 40%, will push another 1.6m older people into fuel poverty. 

Dot Gibson, NPC vice president said: "Today's announcement will have a devastating effect on those older people already struggling to pay their energy bills and is likely to drag well over a million more into financial hardship. Around 2.4m pensioner households are currently spending more than 10% of their income on fuel bills, and a 40% increase in energy bills will mean that millions of older people will be facing even higher bills than before and having to make the unenviable choice between whether they can eat or heat." 

"For every 1% increase in bills, a further 40,000 older people fall into fuel poverty and every year, well over 20,000 die from the cold. A 40% increase will therefore mean 1.6m older people falling into fuel poverty. It's time the government intervened to prevent the energy companies making profits at the expense of vulnerable pensioners, raised the winter fuel allowance to £400 and regulated social tariffs to give proper discounts to older customers." 

ENDS 

For more information contact Neil Duncan-Jordan on 07940-357-608 

FUEL POVERTY FACTS

• Nearly 90 per cent of all excess winter deaths are of people over the age of 65.
• There were 22,300 excess winter deaths of older people last year, and 260,000 since 1997.
• Almost one in three older people live in homes with inadequate heating or insulation making their homes more difficult to heat and/or keep warm.
• More than 1 in 4 people living in fuel poverty are over 70 years old
• Average annual energy bills now exceed £1,000. This will absorb 16 per cent of the income of a single pensioner dependent on the pension credit minimum guarantee and the current £250 Winter Fuel Payment

Pensioners forced to open bank accounts

Hundreds of thousands of pensioners are being told to open bank accounts if they want to continue getting their state pension, according to Britain’s biggest pensioner organisation, the National Pensioners Convention (NPC). 

Currently around 400,000 over 60s still receive their weekly or monthly state pension payment through a giro cheque that can be cashed at their local post office. Up till now ministers have accepted that this arrangement could continue, but the NPC has learnt that letters are being sent to these pensioners telling them that the giro cheques are being withdrawn in 2010 and that they will have to have their pension paid directly into a bank account. 

The NPC, which opposed the scrapping of the original pension book back in 2003, believes that this latest move will not only further undermine the viability of hundreds of local post office branches resulting from a loss of income, but will also seriously restrict the ability of pensioners to manage their day-to-day financial affairs. 

Cheques are issued to the pensioner’s home address on a regular basis to match the current frequency of their benefit or pension payments, either weekly or monthly. If the individual cannot collect their pension in person, they can sign the back of the cheque to indicate that they have asked someone else to cash it on their behalf. The person cashing the cheque will also have to sign and provide suitable identification. 

Dot Gibson, NPC vice president (who is one of the 400,000 pensioners currently receiving her pension by cheque) said: “For many older people, the cheque payment enables them to easily get a friend or neighbour to collect their pension on their behalf. It’s a flexible approach that helps those who may not always be able to get to the post office in person.”

“Lots of older of older people don’t have, don’t want or cannot open a bank account – but they want to keep using their post office to collect their pension. It’s outrageous that the government is now making it difficult for pensioners to get at their own money. The decision to withdraw the cheque payment is yet another attack on both the pensioner and the post office.” 

The NPC believes that the government is unable to legally stop paying pensions, simply because an individual does not have a bank account, and is considering a legal challenge to this latest move. In the meantime, they are advising those affected to ignore any letters advising them to give up their giro cheques in favour of opening a bank account. 

On 15 February 2006, James Plaskitt MP, Department for Work and Pensions minister told the House of Commons: “It is not the Department’s policy to stop an individual’s pension payments if he or she refuses to receive pension payments by the direct payment method. Customers who do not provide account details are paid by cheque.”