...but experts say it won’t last

RETIRED people with workplace pensions now receive 12 times as much as those 40 years ago, figures show. The average disposable income of households with private pension income has grown from £2300 in 1977 to £27,800 in 2016 – in real terms, taking inflation into account. Meanwhile, the average income of households without private pension income has increased from £1700 to £17,200 in the same period. Steven Cameron, pensions director at Aegon, said: “Pensioners in the UK have never been better off. “In the last 40 years, the average pensioner has catapulted out of the lowest income bands, and has even begun to close the gap on average incomes received by the working population.” But the gap between households with a private pension income and those without is growing, according to Office for National Statistics data. By 2016, retired households receiving a private pension had disposable income that was 1.6 times higher than households that were not.

Between 1977 and 2016, disposable incomes of retired households increased at an average annual rate of 2.8 per cent after accounting for inflation and changes to household composition, the ONS said.

This compares with average annual growth in non-retired households of 2.1 per cent.

Sir Steve Webb, a former pensions minister who is now director of policy at insurer Royal London, said: “The big growth in pensioner incomes is driven by people retiring with good company pensions.

“But today’s workers are not building up pensions that are anywhere near as generous.

“While pensioner poverty rates have dropped, this could go into reverse if today’s workers do not build up their own pensions at a much faster rate than they are at present.”

Tom Selby, of AJ Bell, said the figures are “a stark reminder of the impact failing to save for retirement can have” and added: “Savers need to realise that the responsibility is firmly on their shoulders.” UK PAYMENTS processor Worldpay have been granted a second extension for merger talks with US suitor Vantiv as the firms haggle over terms of the £9billion deal.

The last-minute extension sees Vantiv given until 5pm on August 11 to make a firm offer or walk away under City takeover rules.

Worldpay said “positive discussions” are continuing between the two companies as they thrash out the final details. WITH TRICIA PHILLIPS ONE in 10 over-50s are considering retirement abroad for a better and cheaper lifestyle – and warm weather.

Spain is the most popular country, followed by France and Portugal, with America, Australia and New Zealand in the top 10, research from Retirement Advantage reveals.

But choose the wrong country and you could pay a hefty financial price.

Countries in the EU have reciprocal arrangements with the UK, meaning the state pension will increase each year – currently by a minimum 2.5 per cent under the triple lock – but Australia, Canada and New Zealand don’t.

Someone who retired in 2007 to a country without a reciprocal agreement will be stuck on a frozen pension of £87.30 a week, 40 per cent less than the current £122.30 old-style state pension, or £1820 less a year.

Andrew Tully, pensions technical director at Retirement Advantage, said: “Retirement means different things to different people but without the right planning and financial advice, retirement can become a nightmare.

“Local tax laws, currency exchange rates and other financial issues can catch out the unwary.”