Inequalities and poverty in retirement

This chapter looks at inequalities and poverty in retirement. Inequality is a relative concept, in which the position of one individual or household in a distribution – normally an income distribution – is compared with that of other individuals or households. There is no single definition of poverty. The concept can refer to an absolute standard, such as a minimum level of income which society agrees to be acceptable for providing a basic standard of living (a ‘poverty line’). Alternatively, poverty can be measured in relative terms. This chapter includes a discussion of both relative and absolute poverty measures.

The analysis begins by looking at inequalities.First it compares average incomes and income inequalities of retired and non-retired households over the last three decades.Then it looks at the effect that different sources of income have on a pensioner household’s position within the income distribution. The discussion of income inequality concludes with an exploration of other characteristics associated with a household’s position in the income distribution, such as the type of household, age, ethnicity, employment status and housing tenure.