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Pensioner incomes outpace those of working families

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13/02/2017
Pensioner incomes have overtaken those of working age families for the first time, according to a report by the Resolution Foundation.

The think tank said the main drivers of pensioner income growth are more people working later in life, owning their home and having access to generous private pensions.

The report said typical pensioner households are now £20 a week better off than typical working age households, after housing costs.

In 2001 typical pensioner incomes were £70 a week lower than working age incomes.

However, this strong growth is not the result of a boom time for all pensioners, with most finding that their personal situation changes little from year-to-year, the report said.

While typical incomes across the pensioner population have grown by over 30% since 2001, the typical income of someone who turned 65 in that year was only 7% higher by 2014.

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.

“Of course, not all pensioners can draw on these income sources, which is why the state pension will always be the main income for many pensioners. We can’t assume either 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.

“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.”

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