Today's blog post is written by Phil Mawhinney, Runnymede research and policy analyst

Nearly 4.5 million people over 60 years old, or one in three, can only afford the basics in life, according to a new report by Age UK. The research shows how pensioners maximise every single penny, and the sacrifices they make to get by. This includes living in just one room and going to bed early in order to keep warm and save on energy bills.

Over the last few years, Runnymede has been researching the experiences of older Black and minority ethnic (BME) people. We know that they are more likely to live in pensioner poverty. While one in six white pensioners live in poverty, this rises to nearly half of Bangladeshi and Pakistani pensioners and one in every four Black Caribbeans.

I attended the launch of the Age UK report, which received some press attention, and I have two observations to share.

Firstly, the stats showing progress on pensioner poverty hide a more complex reality.

The most recent Joseph Rowntree Foundation report into poverty  notes the ‘historical reversal’ of levels of pensioner poverty, with it being reduced by a third since the mid-1990s to a level below that of working-age poverty. This has happened largely because of government investment in Pension Credit Guarantee, which tops up everyone’s income to a level just above the poverty threshold (in theory at least – many do not claim it).

What this new research shows is that there are many older people hovering just above the poverty line, making real sacrifices – one participant in the study described a can of soup as a ‘treat’ – and being extremely vulnerable to financial shocks. Nearly one in five survey respondents said they would find it difficult to pay an unexpected bill of £150.

Secondly, the rapidly growing population of BME pensioners may be at risk of poverty.

Runnymede research shows that there may be 12 times as many BME people aged 65 and over in 2051 as there were in 2001. We know that BME pensioners in 2012 are at particular risk of poverty. But we also know that BME people in today’s labour market are more likely to experience discrimination,  in-work poverty and unemployment, and therefore have fewer savings and pensions (as we have reported on previously.  

As we have recommended elsewhere, government should step up its efforts to combat discrimination in recruitment and reduce ethnic inequalities in education, health and earnings. Government and banks should work together to offer people on modest incomes a feasible way of saving for retirement.

These are just some ways in which we can look to the future and do our best to ensure that everyone, regardless of ethnic background, can work at a decent job, save something for the future and enjoy a retirement that doesn’t rely on shopping for reduced-price food in Tesco.