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Investments boost pensioner income by £10bn a year
Savings and investments boost pensioner incomes by an average of £1,445 a year, but the figure is way below the 2008 peak.
In total, saving and investment income is worth around £10.3bn to retired households – the equivalent of 6.8% of annual pensioner income, according to analysis from MetLife.
But this figure is below the £12.38bn earned in total in 2007/08 before the financial crisis hit and interest rates were cut to 0.5%, and when average retired households made £1,863 from interest on cash savings and returns on equity-based savings.
The slump in investment savings contrasts with the rise in total pensioner income. Government data shows median retired household incomes at £21,100 are now £1,800 higher in real terms than at the depths of the recession in 2007/08.
For wealthier households investment income contributes nearly 22% of total income and is worth around £8,200 annually.
Dominic Grinstead, managing director of MetLife UK said: “Investment income can make a major contribution to boosting standards of living in retirement and the £10.3bn earned a year is substantial.
“But historically low interest rates and continuing volatility has squeezed investment income for retired households highlighting the need for alternative solutions which can help boost pensioner finances.”
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