Pensioners and children are being left behind
The official poverty numbers published today (16 March) are the most important for years. That’s because they confirm something that has looked like it has been there for a while – but which couldn’t be distinguished from a blip in the data until a third year of data came in.
That ‘something’ is that the proportions of both pensioners and children living in low income households are now on rising trends. Pensioner poverty has not been on a rising trend for a generation.
These latest figures are for 2015/16. In that year, 16 percent of pensioners and 30 percent of children lived in households where the income, after housing costs and adjusting for the fact that a larger family needs more money to reach a given standard of living than a smaller one, was below 60 per cent of the 2015/16 average. In terms of numbers, that is 1.9 million pensioners and 4.1 million children.
Both the pensioner and child poverty rates reached their low points four years earlier, in 2011/12. Since then, both the pensioner and child poverty rates have increased by three percentage points. For pensioners, that is an increase of 0.4 million and for children, 0.5 million. This has driven the overall poverty rate up a fraction, to 22 per cent, and the overall number in poverty to 14 million.
The rise in child and pensioner poverty after 2011/12 coincides with the point at which median income begins increasing– the income of the household in the mid-point of the income distribution. This will provoke the oft-heard cry that ‘this isn’t really poverty’. The use of the current year 60 per cent threshold is crude – an average over several years, if it could be agreed (a big ‘if’) would be better. But over a period of years, poverty can only be measured relative to a contemporary, up-to-date threshold rather than an out-of-date one. The message is clear. Over the past few years, during a period when average incomes started to recover from the financial crash, poor children and pensioners did not share in the improvement. Once more, those at the bottom of the income distribution are getting left behind.