Poverty and Income Inequality in Scotland 2022-25

6   Pensioners

Pensioners are adults who have reached their state pension age. Women’s state pension age reached 65 in November 2018, aligning it with men’s state pension age. Since December 2018, the state pension age for both men and women has been increasing. In the latest data period included in this report, the state pension age for both men and women increased to 66 years.

6.1     Relative poverty

The relative poverty rate after housing costs for pensioners was 13% in 2022-25, or 130,000 pensioners each year. The poverty rate has been consistently below that for working-age adults (18%) and children (21%).

Before housing costs, 15% of pensioners (160,000 pensioners) were in relative poverty. The measure showed a long decline until 2008-11, was then largely stable for a few years before it started to rise again. In recent years, since 2015-18, relative pensioner poverty has been largely stable.

Note that for pensioners, the before housing costs poverty rates are higher than the after housing costs poverty rates. This is because the majority of pensioners tend to have a relatively low income but also low housing costs as a large proportion own their home. It is therefore more meaningful to use the after housing costs poverty measure for comparing the standard of living between pensioners and other age groups.

6.2     Absolute poverty

Absolute poverty after housing costs for pensioners was 14% (140,000 pensioners each year) in 2022-25. Before housing costs, it was 17% (170,000 pensioners). Absolute poverty has remained broadly stable since 2008-11.

Similar to the other absolute poverty charts, the increase in absolute poverty rates, following the break, is expected because the real incomes in the 2024/25 reference year are higher than in 2010/11.

6.3     Material deprivation

In 2023/24 an updated suite of questions for pensioner material deprivation was included in the FRS survey. For the updated measure, pension-aged respondents are asked whether they have access to a list of 19 goods and services with those lacking 4 or more of these items being defined as being in material deprivation.

In 2022-25, according to the updated questions, 9% of pensioners were in material deprivation. This figure is presented as a single dot in figure 11 and covers two years of survey data. This estimate should not be compared with the three-year averages from the previous series.

Users should refer to the background notes or DWP’s Material Deprivation Technical Report for more information.

Historically, there had been a long term decline in pensioner material deprivation since 2009-12. The 4% estimate reported for 2019-22 should be treated with caution due to the impact of the COVID-19 pandemic, the sorts of activities people could do and how respondents answered the material deprivation questions.

Pensioner material deprivation is not affected by the recent data linkage change as it does not incorporate reported income like the combined child low income and material deprivation measure does.