UK elderly fourth poorest in EU ( Is this a result of economic policy?)

Thrugelmir

Reading this article made me wonder. Is this the result of the non saving, consumer orienatted, debt ridden society we have become. Where saving for retirement for many became little more a gamble on houses or relying the nanny state to support them.

Rather than saving sensiblty over the longer term.

The UK has the fourth-highest level of poverty among over 65s in Europe, behind countries like Romania, European Commission figures have shown.

Only Cyprus, Latvia and Estonia rank lower than us. :eek:

http://news.bbc.co.uk/1/hi/uk/8169859.stm

Mr_Mumble

Are the BBC intentionally trying to mislead here? A headline of "UK elderly fourth poorest in EU" will be read by most as absolute poor i.e. Romanian pensioners get more than UK pensioners. In reality of course the BBC are talking about relative poverty (<60% of the median income vs others in the same country) a term used by the EU but that is ridiculed by serious economists such as Tim Harford:

If everyone in Europe woke up tomorrow to find themselves twice as rich, European poverty rates would not budge. That is indefensible. Such "poverty" lines measure inequality, not poverty, and they do so clumsily..

The Age Concern press release is far clearer as to this only being a look at relative poverty on a national level. From its second paragraph:

New figures from the European Commission’s statistical agency Eurostat reveal that‚ even before the recession set in‚ a higher proportion of older people in the UK were living on incomes far below the national average compared to those in countries such as Poland and Romania. The figures have become available shortly before a major review of the Government’s efforts to tackle pension poverty is published on Thursday 30 July.

Age Concern (now merged with Help the Aged) received £2m from the government last year. So we have the state broadcaster reporting on research done by a supra-national state organisation with a response from the state financed Age Concern and rebutted by the state. When Prescott talked about joined up government did he simply mean everyone will be part of the government?!

missile

I don't think we should read to much into these comparisons, when the Czech Republic is ranked the highest!

ruggedtoast

Its based on purchasing power parity I imagine.

As a slight aside an elderly relative has to go into an old peoples home shortly. The family have been quoted between £350 to £750 pounds per week for standard care.

Her pension and the rental from her house will just about cpver it. It does make you wonder whats going to happen to current generations though.

MRSTITTLEMOUSE

Well I don't know about anybody else but we're looking forward to retirement in the next few years.
My husband has worked in the same job all his life and with a long running final salary pension plus a state pension and less costs than we have now we'll be much better off.
I do know several people of our age group though who are going to need helped out since they did'nt consider old age would ever come a calling and did'nt plan ahead.

boyse7en

MRSTITTLEMOUSE wrote: »

My husband has worked in the same job all his life and with a long running final salary pension plus a state pension.

Not everyone is lucky enough to have been given a final-salary scheme, to be paid by the current workforce who also have to pay their own private pension contributions.

What I can't work out is why my parents, who get the standard state pension plus my Dad has a part-time job that pays about £25 per week, can afford to run a car, have a couple of holidays a year (cheap, off-season) go to a local restaurant every couple of weeks etc. when it seems many pensioners can't even pay the gas and electric bills. Where does their money go?

kennyboy66_2

Thrugelmir wrote: »

Reading this article made me wonder. Is this the result of the non saving, consumer orienatted, debt ridden society we have become. Where saving for retirement for many became little more a gamble on houses or relying the nanny state to support them.

Rather than saving sensiblty over the longer term.

Only Cyprus, Latvia and Estonia rank lower than us. :eek:

Its absolutley nothing to do with a gamble on house prices.

1) State pension plus minimum income guarantee is in effect a disincentive to save for the poorest.
2) People have little faith in what should be appropriate pension products because of assorted scandals over the last 25 years.
3) The gap between the richest and the poorest has widened over the last 30 years regardless of politically party in power.
4) Probably needs to be an element of compulsion to save for retirement.
5) Women live longer than men - many who are retired now would have had mixed employment history with few having an occupational pension.

MRSTITTLEMOUSE

boyse7en wrote: »

Not everyone is lucky enough to have been given a final-salary scheme, to be paid by the current workforce who also have to pay their own private pension contributions.

What I can't work out is why my parents, who get the standard state pension plus my Dad has a part-time job that pays about £25 per week, can afford to run a car, have a couple of holidays a year (cheap, off-season) go to a local restaurant every couple of weeks etc. when it seems many pensioners can't even pay the gas and electric bills. Where does their money go?

I agree but over the past 40 odd years my husband has paid a fair amount himself each month to the pensions of those in the company that went before him.
That's the way it works.
Plus he's paid extra voluntary contributions to give him better benefits.
I think your other question about why some pensioners manage and some don't is no different as to why some people on the same wage will manage and others don't.
I think some people would'nt manage no matter what you gave them,I know some young people like that.
Being old or elderly makes you no different

michaels

I spotted this piece on the BBC as well and wrote immediately to let them know it was very unclear whether they were talking relative or absolute poverty but I don't suppose they have updated the article. The level of economic comprehension in bbc pieces not directly written by the economics team is very poor indeed.

Don't worry - as incomes fall especially at the top of the distribution a lot of people will be lifted out of poverty - of course they will probably be worse off in absolute terms but less poverty has got to be a good thing - right?!

Mr_Mumble wrote: »

Are the BBC intentionally trying to mislead here? A headline of "UK elderly fourth poorest in EU" will be read by most as absolute poor i.e. Romanian pensioners get more than UK pensioners. In reality of course the BBC are talking about relative poverty (<60% of the median income vs others in the same country) a term used by the EU but that is ridiculed by serious economists such as Tim Harford:

Thrugelmir

kennyboy66 wrote: »

Its absolutley nothing to do with a gamble on house prices.

Investing in property rather than a more traditional pension scheme has been the vogue for many in recent years. Not just BTL , but one house owners that look one day to downsize.

As a nation we save too little. In any form.

nearlynew

Repeat after me.............

My house is my pension
My house is my pension
My house is my pension....................


keep saying it enough and HPI will come to your rescue.