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Rise of the pension millionaires

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Written by: Paloma Kubiak
27/02/2018
The richest 20% of retired couples are pension millionaires, according to analysis of government figures.

This is equivalent of 840,000 couples, who have an average weekly income of £936 – over £48,000 a year – including pension, investments and the state pension.

In order to gain a £936 a week income from personal pension savings alone, a couple retiring today at the age of 65 would need to have a pension pot of £1.03m (used to buy an annuity), according to Aegon.

Its research revealed that the income gap between the richest and the poorest pensioners has also increased over the past decade.

While the richest couples have an average weekly income of £936, the poorest 20% have a weekly income of £257.

Further, the richest pensioners have seen their incomes increase 21% over the last ten years from £774, while the poorest have seen only a 15% increase from £224.

Over the same period the average pensioner couple has seen their weekly income increase 18% from £487 to £576.

Steven Cameron, pensions director at Aegon, said: “A fifth of retired couples could legitimately consider themselves pensions millionaires given the size of their incomes.

“It’s no wonder we’re often said to be living in a golden age for pensioners and many of these people will have benefited from the provision of defined benefit pensions and above inflation increases to the state pension.

“As our figures highlight, this golden age does not apply to everyone and there’s a big and growing difference between the weekly incomes of the richest 20% of pensioners and the poorest 20%. Defined benefit pension schemes while common in the past were by no means universal and many of those pensioners on the lowest incomes will have missed out on these arrangements.”

Related: See YourMoney.com’s Guide to getting a better annuity rate.

 

 

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