Just retired? You’re probably better off than colleagues who left job 13 years ago

A STARK divide in wealth has opened up between younger and older pensioners, figures show.

A report reveals that those who have recently retired have fuelled a dramatic rise in income that has seen pensioners £20 a week better off than workingage households.

However, those who retired more than 13 years ago have barely seen their income increase at all since they left their jobs.

Younger pensioners are also more likely to continue to work past retirement age, further boosting their wealth.

In their analysis published today, the Resolution Foundation found that better occupational pensions have driven the rise in income, which now gives retirees around £5,000 per year.

The think-tank showed that 73 per cent of pensioners also now own their own homes, compared to only 64 per cent in 2001.

Yet while typical incomes across the pensioner population have grown by more than 30 per cent since 2001, the typical income of someone who turned 65 in that year was only 7 per cent higher by 2014.

And nearly one-fifth of pensioner households now have at least one person working – compared to just one in eight in 2001.

The report also found that retirees are now £20 per week better off than working-age households.

This compares with pensioners in 2001, when their typical incomes were £70 a week lower than workers’ pay.

It is thought weekly retirement incomes started to overtake working-age salaries in 2013-2014.

Adam Corlett, economic analyst at the Resolution Foundation, said the rise has led some to assume ‘that all pensioners are enjoying some kind of boom amid the painful squeeze for everyone else’.

He added: ‘The reality is quite different – the incomes of individual pensioners grow relatively slowly, particularly once they’ve stopped working.

‘Instead, 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.’

And he warned that the rise in pensioner income would not necessarily continue.

Mr Corlett added: ‘Future generations of pensioners cannot assume that they will benefit from further gains from these income sources, particularly with home ownership falling and millennials seeing no generational income growth from their predecessors.

‘They will also be less likely to have access to defined benefit pension schemes.’

Last week, the Treasury’s independent watchdog predicted that the state pension age could hit as high as 74 by 2063, as the Government tries to cope with the financial costs of an ageing population.

The Office for Budget Responsibility forecasts say it could rise to 68 for both men and women as early as 2031. It would then reach 69 in 2034, 70 in 2037, and 74 by 2063.

That would mean anyone born after 1989 would have to wait until they are 74 before they can receive the state pension.

A Department for Work and Pensions spokesman said no decision has been made on future changes to the state pension age timetable.