Pensioners’ incomes are now higher than those of working age, according to a report from the Resolution Foundation.
Its As time goes by report found that pensioner households are now £20 a week better off than working-age households, compared with being £70 worse off in 2001.
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It says the change has much to do with weak income growth for those of working age. Typical incomes across the pensioner population have grown by 31% since 2001, and a 65-year-old would only have earned 7% more than their working-age counterpart at that time.
It also refers to the growth in pensioners who work – almost one in five pensioner families now have more than one person in employment.
At the same time, growth in income from private pensions and investments accounted for around half of the 31% increase, according to the Resolution Foundation. Pensioners’ benefit income has also increased by 8% since 2001.
Occupational pensions accounted for more than one-third of gross pensioner income growth over the same period, with a typical pensioner possessing more than £5,000 in annual occupational pension.
Furthermore, many more pensioners own their own property, reducing housing costs and boosting disposable income, the Resolution Foundation found.
Adam Corlett, the author of the report, said: “Although typical pensioner incomes have grown rapidly, individual pensioners may not have experienced rising incomes each year as they have grown older.
“Instead, pensioner income growth is driven by successive cohorts of ever-richer pensioners replacing previous ones.”
However, there is no guarantee that future generations will continue to enjoy this income growth at pension age.
Corlett added: “We can’t assume that young people today will be able to drawn upon the kind of wealth that recent pensioners have accumulated, given the recent fall in home ownership and decline in generous defined-benefit schemes.
“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.”
The report was put together as part of the work of the Resolution Foundation’s Intergenerational Commission, which was set up last year to improve understanding of the interaction between different generations.