Typical pensioner incomes after housing costs now outstrip those of working-age people, a new report suggests. The Resolution Foundation also says pensioners are more likely than their predecessors to be working, own a home and have generous private pensions.
The think tank says growth in pensioner incomes has been coupled with weak income growth for working-age people. Pensioner households are now £20 a week better off than working age households, but were £70 a week worse off in 2001.
However, the report, called As Time Goes By, adds: “This strong growth is not the result of a boom time for all pensioners, with most finding that their personal situation changes little from year to year. ” It says while typical incomes across the pensioner population have grown by more than 30% since 2001, the typical income of someone who turned 65 in that year was only 7% higher by 2014.
Lord David Willetts (an executive chair of the Resolution Foundation and former Conservative minister) said that the “triple-lock” pension policy of successive governments should be reviewed. The triple-lock guarantees pensions rise by the same as average earnings, the consumer price index, or 2.5%, whichever is the highest.
“Of course there has to be some kind of framework for increasing the state pension,” he told BBC Radio 4’s Today Programme.
“But the [triple-lock] is a very powerful ratchet pushing up pensions at a time when incomes of the less affluent half of working households are barely rising at all.”