Income Policy


Current average pensioner incomes are growing faster than average earnings, but it is unlikely that the increases in spending power will continue in the future.
The average increases have largely been as a result of larger increases in incomes of the top three fifths of older society. ; Those in the bottom 40% of pensioner income have not shared in the general growth of purchasing power.
Spending power continues to increase among older women, although from a very low base.
69% of pensioners receive at least half their income from state pensions and benefits.
Nearly 60% of pensioners are now entitled to claim means-tested benefits
Government policy and the current financial uncertainty causes concern for today’s workers when considering their savings options for retirement.
Age Concern Scotland’s Income Policy

Older people should have an adequate income in work and in retirement. Our income policy work aims to:

ensure that all older people should have an income which is sufficient to cover essential items such as food, warmth and housing
enable older people to have full economic and social participation in society, including the ability to exercise choice in spending patterns.
Our view is that adequacy can be defined using research on budget standards, which Age Concern has commissioned through the well respected Family Budget Unit. The budget standards look at the expenditure of older people in great detail, in order to answer the question about adequacy.

We have defined two separate standards:

The ‘Low Cost but Acceptable’ standard – set at £90 in 1999, and currently around £109 at today’s prices, which is the minimum that older people should live on for a prolonged period. We believe that the basic state pension should be at least this rate.
The ‘Modest But Adequate’ standard -around £165 at current prices. We believe every person should have a right to achieve this level of income in retirement through a combination of state and private income – be it occupational pensions, income from savings, or other sources.
Basic state pension

The basic state pension should be set at a level sufficient to cover basic costs, uprated annually to ensure that pensioners benefit from the increasing prosperity of the nation.

In addition, there should be greater coverage for people with limited working lives such as women and carers, and where appropriate, for people who have lived abroad.

Pension Credit

We welcome the increases in support available to older people, and we are hopeful that the reforms of the Pension Service will result in a higher level of income for older people through increased benefit take up.

However, the Pension Service will never be able to get all the money to everyone entitled as long as they are using means testing to distribute income. There will always be people entitled to benefit who do not claim. At the moment, the numbers of people entitled to make a claim but not doing so are estimated at between 30-50%, dependent on the benefit. Almost a third of those entitled to claim Pension Credit do not do so.


Information is a crucial aspect of life for older people, and information about financial matters is the most important part of that. Great changes occur to income at retirement, and the changes to benefits for older people mean that effective information giving is vital in ensuring older people have all the income that they are entitled to.

Although work is being done to make the Department for Work and Pensions more acceptable to older people, and we welcome the more active role that the Pension Service has in giving information to older people, they are not the most appropriate body to give independent advice and information.

Age Concern Scotland views a strong, independent, information-giving sector as being of paramount importance in the fight against pensioner poverty.

Income in old age is of vital importance to older people. It influences older people’s choices in retirement, health and well-being. Poor incomes in retirement mean that older people have fewer choices, die sooner and play a less active role in society.