Pensioner income starting to flatline says government statistics

By Michael Klimes

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Apr 02, 2019

Pensioner income has plateaued with little upwards movement since 2010, according to government statistics published today.

The statistics from the Department for Work and Pensions look at retirement income trends for pensioners since the mid-1990s.

It shows average weekly income for all pensioners was £304 in 2017/18, almost twice the level recorded in 1994/95 of £161, but down from £317 in 2016/17.

Benefit income including the state pension is the single biggest component, accounting for 59 per cent of income for single pensioners and 35 per cent for couples.

Older pensioners aged 75 or over on average have £82 a week more in retirement income than younger pensioners

While auto-enrolment has boosted pension coverage, the reduction of defined benefit and scaling back of the state pension means younger savers risk having lower retirement incomes than their parents.

AJ Bell senior analyst Tom Selby says: “After decades of rapidly rising retirement incomes the good times may be coming to an end.

“The last of the baby boomers are now approaching retirement, with many lucky enough to have built up generous DB entitlements. Those who have already retired have also enjoyed boosts in the value of their state pension since 2010 through the triple-lock.

“The next generation, on the other hand, will likely experience a scaling back in state pension provision, with DB now almost exclusively the preserve of the public sector.”

Hargreaves Lansdown senior analyst Nathan Long adds: “The state pension and income from company pensions has helped ensure pensioner income is flatlining, not falling.

“More people are now receiving money from personal pensions, but having to take personal ownership of your money is a fairly new concept so the pay-out from these pots remains small.”

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John 6 months ago