Older people on lower incomes are being ignored


To triple lock or not to triple lock (the state pension). Who has a secret tax bombshell ready for hard working families? It’s not just the rows that are being repeated in what feels something like an election on autopilot, it’s also the groups of voters that the parties are focusing on: pensioners and the middle income families with kids are where the action is.

But the row about whether younger families or pensioners come first risks missing a trick. Yes voting patterns clearly show the growing importance of pensioner votes in UK elections from the turn of the millennium. And yes it’s right that there is a focus on the ‘ordinary working families’ that Theresa May has spoken of – voters that also featured in Nick Clegg’s ‘alarm clock Britain’ or Ed Miliband’s ‘squeezed middle’. But focus on this latter group is often on younger families with kids – missing one key fact: it’s the older ‘ordinary working families’ that vote.

Almost 70 per cent of those in low to middle income households who are aged between 50 and State Pension Age voted in the 2015 general election, compared to just half of all of those aged under 50, so it’s somewhat of a surprise that this section of the ‘greying vote’ has been largely ignored of late. Generational politics has been boiled down to a straight duel between poorer younger people, and richer baby boomers – but this is a gross oversimplification. There’s a lot that political leaders who want to keep on top of the changing undergrowth of 21st century Britain should learn about the 2 million over 50s ‘ordinary working families’. Here’s a start.

First, this groups is working like never before. Almost three-quarters of this set of the population is in work, only just below the UK average. This is unprecedented. As recently as 1997-98 just 58 per cent of this group were in work, but their employment rate has surged by over a quarter since then.

Second, more work hasn’t translated into a living standards boom. By definition low to middle income households will be earning less than average, but it is striking that four-fifths of this older group earn less than the UK average wage. In addition, as the chart below shows, they have also faced sharper falls in income (once housing costs are accounted for) than average; their typical household is still lower than it was in 2003-04. In contrast, typical household income for the UK as a whole is now back above the level it reached just before the financial crisis.

Third, it’s not just low earnings that are hitting this groups living standards – rising divorce rates are having an effect too. The proportion of older low and middle income households comprised of single people has almost doubled over the last 20 years to 38 per cent. This rise presents a big challenge given the extra costs of living alone. Think of paying for two homes rather than one.

Fourth, this group reminds us that not all baby boomers are wealthy. Less than half of them have more than a month’s worth of income in savings and their average wealth (including housing, pensions and other savings) comes in at £245,000. That’s less than a third of the over £800,000 wealth held by higher income households of the same age. Helping this group save for an impending retirement should be a top priority.

So here’s the ‘ordinary working families’ that vote – the over 50s: working more, earning less, getting divorced. The poor people putting together the parties’ manifestos over the next fortnight shouldn’t forget them.

This post originally appeared on Times Red Box