Pension adequacy concerns have grown, after research from the Joseph Rowntree Foundation showed recent progress in pensioner poverty rates had “almost completely reversed” in 2021/22, with around 2.1 million pensioners in poverty.

The report, UK Poverty 2024, highlighted pensioner poverty as a “striking trend”, with rising rates of pensioner poverty seen over the past 10 years, after nearly two decades of decline.

Indeed, the report showed that while pensioner poverty fell in 2020/21, particularly among female pensioners, these reductions were almost completely reversed in 2021/22 when poverty rates rose back towards their pre-pandemic levels.

In particular, it revealed that the proportion of children in poverty rose by 2 percentage points to 29 per cent, while the proportion of pensioners in poverty rose 3 percentage points to 18 per cent.

The poverty rate for single pensioners was almost double that of couple pensioners, at 25 per cent compared to 14 per cent for couple pensioners.

Further increases in pensioner poverty could lie ahead, as separate research from WPI Economics previously, on behalf of the Centre for Social Policy Studies, found that the Autumn Budget measures, including cuts to National Insurance Contributions, while expected to reduce the overall number of people in poverty, will increase the number of pensioners in poverty by 10,000.

However, the Joseph Rowntree Foundation's report suggested that there are some reasons for optimism, pointing out that, at a minimum, the triple lock mechanism makes sure the value of the state pension keeps up with prices.

It also acknowledged that pensioner incomes are less affected by changes in the labour market, and more new pensioners will have some private pension provision because of the introduction of auto-enrolment into pension schemes.

However, it argued that the shift from defined benefit (DB) to defined contribution (DC) pension schemes will result in more risk and volatility in occupational pensions in retirement, while lower homeownership will mean more pension-age people need to cover the costs of private rental accommodation over the coming years.

The rising levels of inactivity among people in their 50s and 60s since the Covid-19 pandemic are also concerning, according to the foundation, with people often underestimating their life expectancy after retirement and how long a period their retirement income needs to cover.

Given these concerns, the foundation emphasised the need to put future pension provision on a more secure footing by raising minimum contribution rates and establishing good options for people to use their savings pot to provide a secure standard of living in retirement

Beyond all of this, however, it argued that a vision for reducing poverty in the broadest sense is needed, to ensure everyone can afford the essentials.

Commenting in the foreword, JRF group chief executive, Paul Kissack, stated: “In short, poverty in the UK is deepening. The deeper we look, the faster it is rising. People in poverty are moving further and further below the poverty line…

“This is a story of moral and fiscal irresponsibility. And it is a story we must change… 2024 will be a year of important choices, the consequences of which could last far into the future as the nation goes to the polls.

“Political parties in the UK will set out what they stand for and the sort of country they wish to help shape.

“Any party serious about governing must be both practical and ambitious if we are to turn the tide of deepening poverty of the past 25 years.”

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