Pension crisis ‘may increase child poverty’

Pension crisis ‘may increase child poverty’


By Jamie Carpenter

Regeneration magazine




Government plans to end child poverty by 2020 could be seriously undermined if parents are forced to save more to avoid hardship in retirement, according to research published this week.


The study, published by social policy research charity the Joseph Rowntree Foundation, says that low-income families face a ‘see-saw’ dilemma, having to choose between child and pensioner poverty.


It found that parents who have to set aside a considerable part of their income to save for their retirement could increase their children’s risk of poverty.


The study, carried out by the University of Bath, says that child tax credits and benefits give parents with toddlers the same financial benefits as those with older teenage children, not allowing for the extra costs parents face as their children grow up.


It also warns that limited guarantees to uprate benefits and credits in line with earnings mean that the relative value of support from the Government for the lowest earners will decline over the longer term. It says that schemes like the working tax credit will ‘erode completely’.


Dr Martin Evans, senior research fellow at the University of Bath’s Centre for the Analysis of Social Policy, said: ‘The research’ has shown us that policies to avoid contemporary child poverty should not simply focus on children without also considering the life course of their parents.’


Kate Green, chief executive of the Child Poverty Action Group, said: ‘All too often child benefit and child tax credit do not protect vulnerable families from poverty.’


Gordon Lishmam, director-general of Age Concern, said: ‘Even for those on average incomes without children, the declining value of the state pension, coupled with declining contributions to occupational pensions, will lead to significant risk of poverty in retirement.’


The report also found that low-paid workers over the age of 35 who decide to re-train for a new job in the hope of earning more money may not earn enough to make a significant impact on their chances of escaping poverty.


It says that escaping low pay after the age of 35 may be too late to make an impact on lifetime poverty unless people are prepared to work beyond retirement age.


The Effect of Tax and Benefit Policy over Different ‘Model Lifetimes’ is available at


Source: Regeneration magazine