More than half of the increase is attributed to improved private pension income, which the ONS says has increased “seven-fold” over the same period. But the difference between a pensioner household with a private pension income, and one without, is that those without are not seeing cash benefits increasing sufficiently, so there is an overall inequality in income between the two.
That, frankly, should come as little surprise. If someone has chosen not to save, or not been able to save, into a private pension, then it surely would follow that they are going to have less money in retirement than someone who has.
The figures that are, bizarrely, not included in these calculations are housing costs. If you have a mortgage, or you have to pay rent, you are generally going to be worse off than those who have their own property, or have paid off their mortgage during the time you need to save for your pension.
That is a statement of the bleeding obvious, so I really do not understand why they have excluded housing costs from these figures. A property is likely to be one of the largest single expenses for a family or individual each month.
That aside, though, the disposable rate of income for retired households has increased at an average rate of 2.8 per cent after inflation, compared to 2.1 per cent for non-retired households.
The credit crunch
Retirees have also managed to avoid the worst ravages of the credit crunch too, with the income in 2016 at 13 per cent higher than the pre-downturn levels in 2008. Non-retired households have seen their income come down by 1.2 per cent over the same period.
When it comes to the current crop of pensioners – and these figures outlined by the ONS – it is hard to argue against them being better off. This generation has benefited handsomely from the final salary pension schemes of yesteryear, the gold-standard pension which meant an employee never had to worry about how a scheme was performing because they would be paid something like two-thirds of their final salary as a pension, no matter what.