Recent research has revealed that the poorest 10% of the British population included 1.4 million pensioners in 2016/17.
This shows that pensioners make up over a third (38%) of the group, up from 28% in 2014/15.
Statistics from the government also indicated that pensioner inequality has increased over recent years, with income for poorest pensioners dropping by 0.73%, whilst those at the top of the scale saw a 10% growth over the same period. As a result, the income gap between the million at each end of the spectrum has reached £50,898 per year on average.
The fluctuations in retirees incomes has been factored as a major contributor to the disparity, with the poorest 10% receiving £1,639 from annuities and pensions during 2014/15. In the following year, this figure fell to £1449. In contrast, pensions and annuities rose from £34,709 to £39,507 over the same period.
Commenting on the figures was Stephen Lowe. The group communications director at Just Group highlighted the reality of the problem and how the new Financial Guidance Bill could help to alleviate the issue.
“These figures show that for millions of people the pensions crisis is not a thing of the future, it is happening now. While we often hear about how well the ‘Baby Boomers’ are doing, this focus on the wealthiest ignores another very serious problem. For those who have least, how they use their pension pot in retirement can make the biggest difference.
“The Financial Guidance Bill going through Parliament could help resolve this glaring omission from the Pension Freedoms policy – ‘what to do about those not getting advice or help?’. The Bill’s proposal to automatically enrol everyone into free impartial guidance will equip people to make better informed decisions and help to prevent people from being scammed, paralysed by choice or following the path of least resistance into uncompetitive and perhaps ill-suited products.
“People naturally disposed to taking professional advice may choose to opt out of free guidance but for the many millions of people who don’t currently receive help, automatic enrolment into guidance could be a game changer.”
