Payments coming into the average pensioners’ home last year surged to £27,283, marking an increase of almost 60 percent since 2005-06, figures from the Office for National Statistics show. The figures estimate the average pensioner household income is therefore £10,000 greater than 13 years ago. However, costs for retired households increased by 38 percent during the same period. For those still working, non-retired families have seen their income increase by 36 percent compared to more than 10 years ago, to £36,332.
At the same time, household costs for workers have grown by 31 percent, while younger families also face additional costs over pensioners, including child care and mortgages.
Pensioners also benefit from the triple lock on state pensions.
Introduced in 2011, the triple lock guarantees the state pension amount in the UK rises each year.
The increase depends on if the rate of inflation or average earnings growth is greater.
Helen Morrissey, pension specialist at Royal London, said: “The statistics show the important role that private and occupational pensions have played in safeguarding the incomes of today’s retirees.
“But the decline of final salary pensions and low levels of contributions into newer pensions means the improvement in pension incomes could go into reverse without government action.
“This should include driving up pension contribution rates and widening the scope of the policy to include groups such as the self-employed.”
Jon Greer, head of retirement policy at Quilter, said: “The financial bond between generations is at threat of eroding.
“Figures from the Office for National Statistics show that there is drastic divergence in disposable income for retired and non-retired households.
“Between 2006 and 2018 household income for non-retired rose by 36 percent and retired rose by 60 percent while costs rose by 31 percent for non-retired and 38 percent for retired.”
He continued: “The number of retired people is only going to grow as people live longer, drawing the state pension for longer and increasingly tap into the NHS for medical treatment and local authorities for social care.
“That combined with a fundamental change in family structures means that a fundamental re-think is required, and it does not appear that tweaking the current system by increasing the rates of existing taxes, is going to adequately address this issue.
“Clearly the whole system needs a rethink.
“The report flags important pension related policies that need to be addressed and while the report doesn’t have all the answers these issues are clearly ones that need to continue to be examined.
The findings from the ONS come as a Lords committee called for pensioner perks, including free TV licences and bus passes, to be abolished.
Winter fuel payments and the pensions triple lock were also in the firing line by the Committee on Intergenerational Fairness, who called for the end to these subsidies.
The report claims pensioner households are now on average better off than many working age households, both in terms of income after housing costs as well as household wealth.
Committee chairman Lord True said benefits must be rebalanced towards the young to prepare the country for 100-year lifespans.
However, the report sparked fury among charities and pension groups, who warned it would punish elderly people on low incomes.