Investigating the impact on mental wellbeing of an increase in pensions: A longitudinal analysis by area-level deprivation in England, 1998–2002

Abstract

In 1997 approximately two million people aged 60 years or over were living poverty in the UK. In 1999 the UK Government raised real pension incomes of low-income pensioners by around a third through the introduction of the Minimum Income Guarantee (MIG). This study explores the implications of this change for pensioners’ mental wellbeing with a focus on differences by area level deprivation in England. We explore mental wellbeing outcomes of 205 men (750 person-year observations) and 367 women (1,336 person-year observations) of state pension age from scores on the General Health Questionnaire from the British Household Panel Survey using a panel difference-in-difference estimation procedure. We compare the mental wellbeing of pensioners receiving MIG to that of low-income pensioners not claiming MIG, from 1998 to 2002. To investigate differences by area deprivation we use quintiles of the of the distributions of the 2000 and 2019 local-authority-level English Index of Multiple Deprivation. Models controlled for age, marital status and year. Between 1998 and 2002, 136 (38%) of low-income women and 57 (28%) of low-income men in the sample were claiming MIG at any one time. Income increased by 31% for men and 22% for women. There was no change in mental wellbeing for women but we found an improvement for men overall and for men living in the most deprived areas, in the latter case with a decrease of the GHQ-12 score of 2.43 points (95% CI: −5.49, 0.02). This estimate was similar across all measures of deprivation, and across both years of IMD. This study provides tentative evidence that the increase in pension income in England for low-income pensioners contributed to a reduction of inequalities in mental wellbeing for men. This needs to be considered in terms of future state pension policies.