Memorandum submitted by West of Scotland
Seniors Forum
ORGANISATIONAL BACKGROUND
West of Scotland Seniors Forum (WSSF) is the
umbrella organisation for an extensive network of 95 grassroots
local senior forums in the 12 local authority areas in the West
of Scotland. We also have strong links with older peoples' organisations
throughout Scotland and further afield.
WSSF believe that poverty strips pensioners
of their dignity. Poverty affects their self-esteem, their confidence
and makes them feel totally powerless.
Our submission will be dealing with pensioner
poverty.
What is poverty?
WSSF are clear that we are talking about relative
poverty and not absolute poverty that exists in the third world.
However, relative poverty, in our opinion, is more than just about
income levels.
— Pension credit level of £114
is a subsistence level.
— Diminution of choices, not just about
money.
— No money for extras like presents
for grandchildren.
— Worrying over a lack of money.
— Cannot afford insurance.
— Cannot afford to use the telephone
to contact friends and family.
— Cannot afford to socialise and become
socially excluded.
The extent of poverty
The Households Below Average Income Series for
2004-05 reports that:
— Between 1994-95 and 2004-05, there
was no consistent change in the proportion of pensioners living
in households below thresholds of contemporary median income on
a Before Housing Costs basis; a slight rise was followed by a
fall since 1998-99. For income After Housing Costs, the proportions
showed a marked fall, from 1998-99.
— From 1994-95 to 2004-05, there were
pronounced falls in the proportions of pensioners below low-income
thresholds held constant in real terms, on both income measures.
As with contemporary income, falls on the After Housing Costs
basis were more pronounced.
— In 2004-05, pensioners were more
likely to be in the bottom two income quintiles on a Before Housing
Costs basis (or in the second quintile After Housing Costs), and
less likely to be in the top two quintiles of the income distribution,
than the population as a whole.
— Single female pensioners had a higher
risk of low income than their male counterparts.
— In general, the older the age of
the head, the greater the likelihood of low income.
— Pensioner families living alone had
a greater risk of low income than those living with others.
— Pensioners living in a household
headed by someone from an ethnic minority group had a greater
risk of low income.
— The majority of pensioners in low-income
households were owner-occupiers who owned their homes outright,
although the risk for this group was fairly typical when compared
with all pensioners.
— Around half of pensioners in households
below 60% of contemporary median household income had a personal
or occupational pension, or their partner did.
Contributing factors
— Income drops dramatically when you
retire.
— Earning low wages while working means
some people cannot save for retirement.
COUNCIL TAX
Rising Council Tax places an unfair burden on
older people by accounting for an average of 5% of their household
income compared with 3% for working age households. This has the
same effect as making pensioners pay an additional 2p in income
tax compared to ordinary households.
In the last 10 years council tax has risen by
80% while the basic state pension has only risen by 40%. Therefore
Council Tax is a tax on Seniors.
Council Tax benefit is not being claimed by
many Seniors who would be entitled to it. Around 40% of eligible
Seniors do not claim.
— Recent Gas and Electricity price
rises.
— Some people poor at handling money.
— Isolation and not getting advice
on benefits or other help.
— Credit unions should be widely publicised.
— Loan sharks should be prosecuted
and put out of business.
— Cost of living keeps rising.
— Credit is too easy to obtain.
— Rural areas have less help than urban
areas, such as lunch clubs.
Impact of Government policy on poverty
The introduction of the Pension Credit has helped
many pensioners however government figures suggest that between
22% and 36% (more than a million pensioners) who are entitled
to it do not claim it.
Council Tax benefit non-take up has about the
same percentage and for Housing Benefit, one in ten do not claim
their entitlements.
The introduction of the winter heating allowance
has also helped many pensioners to worry less about the cost of
their winter fuel bills. However, the benefits of this have recently
been negated by the massive increases in gas and electricity charges.
The introduction of a £200 rebate on council
tax in 2005 was of great benefit to many pensioners. However,
they will suffer in 2006 as it is not available this year.
— Government could do more to identify
those on low incomes and not claiming proper financial help.
— By abolishing means testing and introducing
a citizens pension every pensioner would get a certain amount
of money to live on.
— State pension should be linked to
earnings so all pensioners can benefit from rising living standards.
— Council tax should be replaced with
a fairer system based on ability to pay and not on the value of
a home.
Agnes McGroarty
Chairperson
2 October 2006
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