Retirement and the income of older people: a British perspective

Little is known about the income dynamics of retirement in Britain, in part because of a lack of data. The information is of some topical interest given the growing number of older people, the trend towards earlier retirement, the decline in the value of the basic state pension, the growing reliance on occupational and private pensions, and continuing relatively high poverty rates among people in old age. This paper considers the important question of income and retirement and, in particular, the association between transitions into retirement and the probability of becoming poor. It is based on longitudinal data from the British Household Panel Survey waves 1-9, covering 1991-1999. We also relate differences in poverty entry probabilities among the retired to differences in factors such as a retiree's health, housing tenure, age and sex, education, labour market status and history, household composition and spouse's characteristics.