13 Feb 2017
The income of a typical pensioner household has now surpassed that of an average working family, a new report suggests.
According to a study by the Resolution Foundation, pensioner households are now £20 a week better off than their working age counterparts.
This represents a significant change from 2001, when pensioner households were thought to receive £70 a week less than working age households.
The disparity has been attributed to a surge in pensioner wealth which has coincided with low income growth for working age people.
The study, As Time Goes By, found that occupational pensions now represent the biggest source of income for pensioners, accounting for over a third of pensioner income growth since 2001.
Researchers also found that an increasing number of pensioners (74%) now own their own home – up from 64% in 2001, while many people are choosing to remain in employment in their later years.
Adam Corlett, Economic Analyst at the Resolution Foundation, said: ‘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.’
However the study has urged caution, with experts warning that future generations should not necessarily expect to benefit from the same income growth as that currently being enjoyed by many pensioner households.
‘We can't assume […] that young people today will be able to draw upon the kind of wealth that recent pensioners have accumulated, given the recent fall in home ownership and decline in generous defined benefit schemes,’ explained Mr Corlett.
He added: ‘The big challenge we face as a society is to ensure that the record incomes that a new generation of pensioners are enjoying are not a one-off gift, and can endure for future generations too’.