Work and Pensions written question – answered at on 5 January 2010.
To ask the Secretary of State for Work and Pensions what estimate she has made of the average net change in income of a pensioner receiving no more than the basic state pension in each year since 1997.
Pensioners receiving no more than the basic state pension have been defined as those individual pensioners whose total individual income was below the basic state pension threshold for each relevant year.
The information that is available is shown in the following table. Figures are presented in 2007-08 prices in order to allow comparison over time. The information has been derived from the Family Resources survey and is presented as a three year average to help take account of small sample sizes that exist for subsets of the population.
For context, the basic state pension threshold in 2007-08 was £87.30.
It should be noted that the data are based on individual incomes. As shown in Table 1 above, just 4 per cent. of the individuals' income in this group in 2005-08 provided the total household income. That is, 96 per cent. of this group live in households with other income earning adults and therefore their overall household income is likely to be much higher. The vast majority of this second group are female.
When considering income, household income is most commonly used. This is because the living standards of an individual depend not only on his or her own income, but also on the income of others in the household. Consequently, considering an individuals income is often not indicative of that individuals overall living standards.
The figures in Table 1 should therefore be used to signify the change in this income level, rather than as an indicator of the average level of income that an individual has to live on and consequently a gauge of living standards.
Average weekly income of individual pensioners with incomes below the basic state pension threshold in each given time period (in 2007-08 prices) (£) | Proportion where income from individual is the only household income (percentage) | Change in average individual income (£) | |
1995-98 | 50 | 2 | - |
1996-99 | 50 | 2 | 0 |
1997-2000 | 51 | 2 | 1 |
1998-01 | 51 | 2 | 0 |
1999-02 | 53 | 2 | 2 |
2000-03 | 54 | 2 | 1 |
2001-04 | 53 | 2 | -1 |
2002-05 | 54 | 3 | 1 |
2003-06 | 54 | 3 | 1 |
2004-07 | 58 | 4 | 3 |
2005-08 | 57 | 4 | -1 |
Notes: 1. Please note that figures on change may not match exactly due to rounding. 2. Incomes and change in income are rounded to the nearest pound. |
The figures suggest that while there have been two time periods where the average income has fallen, over the entire period since 1995-98, the average income has risen by £7 in real terms.
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