Weekly pensioner income after housing costs rises £6 in 9 years

Average pensioner income after housing costs increased by just £6 between the 2009/10 and 2018/2019 tax years, according to new data.

A report from the Department for Work and Pensions (DWP) showed weekly pensioner income rising from £314 to £320 during the period, compared to the jump from £165 to £314 between 94/95 and 2009/10.

The DWP said this earlier growth reflected increased income from benefits, including the state pension, as well as increased income from occupational pensions.

In 2018/19 the number of pensioners receiving income related benefits stood at just 23 per cent, down from 37 per cent in 94/95 and 31 per cent in 09/10.

The DWP attributed this to increases in income from state and private pensions over the time period.

The amount of pensioners receiving a state pension rose by four percentage points to 98 per cent during the full 20 year period, while the amount of pensioners receiving income from private pensions climbed by 10 points to 69 per cent.

The report found that the proportion of retirees using personal pensions has also climbed, rising from four per cent in 94/95 to 17 per cent in 18/19.

However, the amount of pensioners receiving investment income was found to have dropped, declining from 73 per cent in 94/95 and 70 per cent in 09/10 to 61 per cent in 18/19.

Additionally, the amount of pensioners that were in receipt of earnings in 18/19 was 16 per cent compared to 11 per cent in 94/95, though this included members of pensioner couples where one member of the couple is below the state pension age.

Quilter retirement expert, Ian Browne, said: “Although pensioner incomes have generally been on the rise, income levels in households recently reaching state pension age fell slightly in 2018/19. And the steep declines in markets across the world in response to the coronavirus crisis could accentuate this trend reversal and will create tough decisions for those rapidly approaching retirement or those currently in drawdown.

"Do you reduce withdrawals or pause them altogether to ensure the longevity of your retirement fund? Or do you simply delay retirement and ride-out the market turbulence to minimise the strain on pension assets?"

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