The Growing Crisis of Poverty in Later Life

At Independent Age we are focused on improving the lives of people facing financial hardship in later life.

We understand the unique challenges faced by older women who don’t have enough money to live on. The gender pay gap and the likelihood of career breaks for childcare or caring for an adult in their life, leave them particularly vulnerable to financial insecurity. These factors have a long-term effect, reducing their private pension contributions and impacting the amount of social security they receive later in life, often resulting in financial hardship. 

Our new research shows that, in Great Britain, if current trends continue the number of people living in poverty in later life could almost double from 2.1 million to 3.9 million by 2040. This will disproportionately affect groups already more likely to live in poverty, including women.  

One poignant example comes from Alison, an older private renter who shared her experience:

“[I want to] feel secure as I get older, which I don’t in my current rented flat because there are many maintenance problems which the landlord is not attending to, and which I dare not complain about for fear of eviction. And the rent increases every two years which means that living here is not financially sustainable for me, so I will have to move soon, and I dread that because I doubt I will be able to have the positive features of my current home in a new one. I’m in a nice neighbourhood, which is peaceful and quiet, and I can easily walk to the shops from my flat.”  

Alison’s story underscores the importance of secure and affordable housing for financial security in later life . Older private renters are at severe risk of financial insecurity. And with an increasing proportion of the population living in the private rental sector long-term, it is imperative that we work to make the sector more affordable and secure for all.  

As part of our goal of reducing financial hardship in later life, we asked experts at the UK Collaborative Centre for Housing Evidence (CaCHE) to analyse how the number of people living in private rented homes in later life could change as well as the number that could end up living in relative poverty. The analysis uses data from the Understanding Society survey and assumes that there is a continuation of poverty trends from 2010 to 2022 without policy changes.  

The findings show that the rate of poverty amongst older people (aged 65+) could increase from 17% to 23% by 2040. Concerningly, we found that the rate of poverty would increase more for women (from 20% to 26%) compared to men (from 15% to 19%). The research also projects that the proportion of over 65s living in the private rental sector could increase from 4% in 2022 to 13% in 2040; totalling about 2.2 million older people. 

Existing evidence shows that older renters are disproportionately likely to live in poverty compared to those who own their home, and the research we commissioned indicates poverty rates amongst renters will continue to rise. The projections indicate that by 2040, 74% of older social renters and 50% of older private renters could be living in poverty. 

Older women are projected to face greater disadvantages than older men. In 2040, older women living in the private rented sector are projected to be at a higher risk of poverty compared to men (54% vs 50%). Additionally, older women are expected to be less likely to be homeowners by 2040, with ownership rates falling from 84% currently to 75% in 2040. 

Our Call to Action 

At Independent Age, we believe no one should face financial hardship in later life, and the affordability and security of someone’s home is a big factor in providing stability.

Therefore, it is vital that policymakers take this opportunity to make sure that this future doesn’t become a reality. Independent Age recommends that the new UK Government: 

• Conducts a cross-party review to agree what level of income is needed in retirement to avoid poverty. 

• Focuses on improving uptake of all social security entitlements for older people. 

• Ensures that Local Housing Allowance is regularly uprated to ensure low-income renters are adequately supported to afford their rent. 

• Introduces reforms to the private rental sector that ensure better security and affordability for renters. 

• Invests in building social housing and improving the quality of existing housing stock. 

• Improves support to help those on low income afford their bills. 

Links for further information and advice 

• You can read the findings of this research in more detail here.  
• If you would like to read more of our policy and research work you can access it here. 
• you can access information and advice guides or get in contact with our advice team though our website here. 
• We have a free helpline open Monday-Friday 8:30am-5:30pm: 0800 319 6789 
• If you would like to join our campaigns network you can do so here.
  

Beth Walters is a Policy Officer at Independent Age and has been a part of their housing policy team for the past two years.

The views and opinions expressed in this blogpost are those of the author’s and do not necessarily reflect the official policy position of the Women’s Budget Group.