Pensioner household incomes now higher than those of working age

Pensioner household incomes now higher than those of working age

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Older male and female to illustrate pensioner income

Financial planning in association with Scottish Widows bannerA new report has revealed that, for the first time, typical pensioner household incomes have overtaken working age households

Pensioner households are, on average, £20 a week better off than their working age equivalents according to a new study released this week. The As Time Goes By report produced by the Resolution Foundation is now in its fourth year and includes a number of other startling statistics.

  • Having been £70 a week lower than typical working-age incomes in 2001-02, typical pensioner households now have incomes that are £20 a week higher.
  • The driving force behind this shift is occupational pensions, which account for over a third of gross pensioner income growth since 2001.
  • 73% of pensioners own their own homes, up from 64% in 2001.
  • The top 20% of pensioner households account for 74% of employment income, 66% of investment income and 52% of occupational pension income.
  • The bottom 20% is reliant on benefits.

The report states that, “Over the course of the 20th Century, years of economic growth and rising living standards meant that we came to take for granted that the income of each generation would be higher than its predecessor.

“For example, average baby boomer incomes at age 55 were £10,000 higher than among members of the silent generation (those born between 1926 and 1945) at the same age.

“However, this generation-on-generation progress appears to have stalled in the 21st century. Members of the youngest of the generations to have reached adulthood – millennials – have not to date secured incomes that are any higher than those of generation X at the same ages.”

However, it is wrong to assume that every pensioner is doing well.

Adam Corlett, economic analyst at the Resolution Foundation, says “The reality is quite different – the incomes of individual pensioners grow relatively slowly, particularly once they’ve stopped working.

“Instead, the main driver of pensioner income growth has been the arrival of successive new waves of pensioners, who are more likely to work, own their home and have generous private pension wealth than any previous generation.”

Pensioner income

Read the report at the Resolution Foundation

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