Pensioners have never had it so good, according to ONS

Pensioners today are almost three times better off than their parents, according to statistics.

Last year, retired households receiving a private pension had disposable incomes around 1.6 times higher than households that were not.

Between 1977 and the financial year ending 2016, the disposable income 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. The average disposable income of households with private pension income has grown from £2,300 in 1977 to £27,800 in 2016.

The average income of households without private pension income has increased from £1,700 to £17,200.

In the financial year ending 2016, those with a private pension had average original incomes around 14 times higher than those who did not receive any private pension income – at £19,000 compared with £1,300.

Sir Steve Webb, a former pensions minister who is now director of policy at 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.”

The ONS said that 40 years ago, just over a fifth (21 per cent) of retired households had an annual disposable income of more than £10,000, after accounting for inflation and household composition. But by 2016, this had rise to 96 per cent of retired households.

More than half of the income increase was due to a near sevenfold rise in private pension income. This was accounted for by an increase in households receiving private pension income and rises in what they received.

The ONS said that although since the financial year ending in 2011 the average value of cash benefits for retired households had generally increased, “those without any form of private pension income are not having their incomes supplemented enough by these cash benefits amounts to reduce overall inequality in income”.

£27,800 Average disposable income of households with a private pension – a figure that has risen from £2,300 in 1977