New poverty rate data: are our retirees doing better than we thought?

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Anyone earning less than 2,279 francs a month in Switzerland lives in poverty. This means that the income is not enough to finance the subsistence level. The poverty line for a family with two children is 3963 francs and 5067 francs including health insurance premiums. People with slightly higher incomes are considered to be at risk of poverty. And this is especially true for retirees.

One in five people reaching retirement age is at risk of poverty. At least if you only consider income. The Federal Statistical Office has included household assets in a new study on measuring poverty. This shows that retirees are the big exception, although risk groups remain similar across all age groups.

Main causes of poverty

If five percent of liquid assets are added to the annual income of those aged 65 to 74, the poverty rate in this age category drops by five percentage points to eight percent. Cash includes bank and postal accounts, stocks and bonds. If all assets except the condominium are taken into account, one more point is deducted.

In this calculation, assets such as cottages are sold. However, the effect is small as only a fraction of the population has a summer residence. On the other hand, selling the property you live in makes less sense as the person will then have to pay rent.

The average wealth of those under 50 is so small that their poverty rate hardly changes. Only among 50 to 64-year-olds the extinction rate drops from twelve percent to ten percent.

Reserves are extremely reassuring

For retirees over 75, the poverty rate actually halves when liquid assets are taken into account: from 19 percent to 11 percent. It is clear that the proportion in this age category is significantly higher: poorer retirees, in particular, have fewer and less high margins as they age. In addition, women are increasingly represented in the age group of 75 and over, due to longer life expectancy.

Being a woman and being retired at the same time remains one of the biggest risks of poverty in Switzerland. Others are low education level, foreign citizenship or living in a rural community. Widowed or divorced people also have a significantly increased risk.

Taking financial reserves into account significantly improves the coverage of key purchases: Calculation without savings, 29 percent of those affected by poverty are affected by material deprivation. If reserves are taken into account, it is again 18 percent. Thanks to savings, 46.4 percent of the poor can afford an unforeseen bill of 2,500 francs instead of 69.9 percent. In addition, only 17.4 percent of low-income households with reserves are dissatisfied with their finances. Almost half without reserve.

Source :Blick