Almost 1.2mn people aged 60 to 65 years old are living in poverty, a report has revealed.
Phoenix, in partnership with the Fabian Society, found this was the highest poverty rate for any adult age group and said this spike was a recent problem.
It found 40 per cent of 60 to 65-year-olds are in households with less than £3,000 in savings and 21 per cent live in a rented home.
The report said poverty was high in the years up to 66 because of the binary divide between working age and pension age which does not reflect the lives of people in their 60s.
It revealed that public policy often assumes most people will work up to state pension age; however just 52 per cent of 60 to 65-year-olds were working in 2023.
Those aged 60 to 65 have lower hourly earnings with many more likely to work part-time or be self-employed contributing to in-work poverty.
The report also revealed 470,000 people between 60 to 65 who are in poverty are in a household with a private pension in payment.
This rises to 47 per cent among households in poverty where no one is in work.
More positively, 24 per cent of 60 to 65-year-olds without work and in poverty live in a household with savings or investments of more than £16,000 including pension lump-sums, redundancy payments and inheritances.
Factors associated with heightened risk of poverty before state pension age include living in rented accommodation, being from a Black, Asian or minority ethnic background and being disabled, single or a carer.
Catherine Foot, director of Phoenix Insights, said: “Huge numbers of people are facing financial difficulty in their pre-retirement years, and it’s likely this situation will worsen without policy interventions as the state pension age continues to rise in the coming decades.
"An increasing state pension age doesn’t automatically mean people are able to remain in work and continue to earn and save. Many are driven out due to factors such as ill health and caring responsibilities, and without sufficient finances could find themselves at risk of falling into poverty.
“We need good work to be more sustainable for people throughout their lives, offering greater flexibility and providing more opportunities to those in their late 50s and 60s to remain in the workplace. And it is crucial that people who are unable to work and are without savings to plug the gap to state pension age are properly supported, or we will face a worsening of financial vulnerabilities.”
Pensions
In September 2023, the Fabian Society commissioned YouGov to conduct a survey of 998 people aged 50 to 65.
It found 56 per cent of 60 to 65-year-olds had taken a private pension before their state pension age.
Of those aged 55 to 65 who had drawn a pension, 56 per cent were not working, 28 per cent were working part-time and 17 per cent were working full-time.
Of those who were not working or working part-time, 20 per cent said they were struggling financially.
