OAPs enjoy a wealth surge

...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 £2,300 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 £1,700 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% after accounting for inflation and changes to household composition, the ONS said. This compares with average annual growth in nonretired households of 2.1%.

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.”