The Joseph Rowntree Foundation (JRF) has today published a report, which highlights a growing disparity in poverty rates among various age groups over the last decade. While the level of poverty has fallen by 30% among the over 65s, poverty numbers have increased in every other demographic.
The failure of successive Governments on the issue of housing has undoubtedly contributed to this trend. There has been a chronic lack of building for some time, and – as the CPS’ most recent Economic Bulletin shows – the situation is getting worse. 125,000 homes were completed in England for 2014-15, dwarfing the 320,000 homes needed to improve housing strains. There has been an inevitable slump in the number of homeowners among 25-34 year olds, falling from 60% in 2001 to just 40% currently, according to the Office for National Statistics.
This has been accompanied with a huge increase in the private rented sector – up 84% from 2000 to 2014 – along with a 227% rise in housing benefit payments to private sector tenants. Despite the marked increase in housing benefit payments, the JRF report suggests that poverty among those renting privately has ballooned from 2.3m to 4.3m over a decade.
Other Government measures favouring the old over the young are also contributing to this disparity – a problem that was recently highlighted by David Willetts. The Institute for Fiscal Studies claim that the average pensioner is now better off than the average working age person, and policies such as the triple lock on the State Pension will undoubtedly exacerbate this difference. It will, of course, also be a major burden on the taxpayer. A report by the Government Actuary’s Department – published in error – projected that the government is spending an extra £6bn a year protecting pensioners’ incomes.
At some stage, policymakers will need to tackle the disparity in the living standards between pensioners and younger generations. Planning reforms are desperately needed to boost housebuilding. A change of course is needed on pensioner benefits. Of course, older voters are more likely to vote, going some way to explaining why there is cross-party support for the triple-lock on pensions. However, in the longer-term the sustainability of such policies is highly questionable.
This is an issue that will have to be dealt with sooner or later.