There is evidence of a growing income gap between retired households with private pensions and those without, the Office for National Statistics has reported.
The ONS’ disposable income figures published today, 10 January, looking at the full year ending 2017, found that there has been an increase in inequality among retired households in recent years.
The report noted that its most recent statistics confirm a widening gap between retired households who are in receipt of a private pension and those who aren’t. Earlier ONS findings stated that in FYE 2016, retired households in receipt of a private pension had disposable incomes that were 1.6 times higher than households that were not.
By the end of 2017, the percentage of retired households receiving income from private pensions rose to 82.1 per cent from 44.5 per cent in 1977.
Additionally, the ONS’ report highlighted that the state pension was the second largest source of income for retired households in 2017 and was the second largest source of growth. It was recorded to have almost doubled from an average of £4,800 in 1977 to £9,500 in 2017.
Furthermore, the report found that although retired household income remains considerably lower than non-retired households, retired households have seen faster income growth from 1977 to 2017. By the financial year ending 2017, the income for retired households was 2.8 times higher at £22,300 (from a median of £7,900 in 1977), while non-retired households had only just over doubled to £29,900 from £14,100 in 1977.
Nonetheless, between 2016 and 2017 the growth in median disposable incomes for non-retired households was 3.5 per cent, almost three times the 1.2 per cent experienced by retired households.
Commenting on the ONS’s findings, Just Group, group communications director Stephen Lowe said: “Today’s figures show that the oft-painted rosy picture of life for retired households is not consistent with reality. Retired households have seen their median disposable income grow at a far slower rate than non-retired households while the poorest retired households are still heavily reliant on the state.
“For these people, every extra pound of income counts, yet our research among home owner pensioner households indicates that they are missing out on thousands of pounds each year – money that would make a massive difference to people’s lives.”