Pensioners are now £20 a week better off than those of working age, a new report has found.
The report, published by the Resolution Foundation, said this was a “remarkable reversal” given that pensioners were on average £70 a week poorer than workers in 2001/2002.
But the Resolution Foundation has warned that while this may be good news for today’s pensioners, it raises problems for today’s workers – particularly millennials – who may not have the opportunity to accumulate assets for their retirement.
The report said: “What the inequality picture looks like for millennials when they approach retirement will depend both on the opportunities they have to accumulate assets over the course of their working lives and on the way in which the unevenly-held wealth of older generations cascades down.”
It added: “Looking to the future it is also important that we learn from recent successes in raising pensioner incomes as we look to ensure future pensioners can also enjoy higher standards of living.”
The report found the 31 per cent growth in pensioner income between 2001/2002 and 2014/2015 had come from a number of different sources – including a growing tendency for pensioners to continue working.
But about half came from increases in private pension and investment income.
The report said: “The closure of generous defined benefit occupational pension schemes to younger workers mean that future gains of this scale are more questionable unless we take further action – particularly against a backdrop of the recent lost decade (or longer) on pay growth.”
About a quarter of the increase in income was attributed to growth in public benefits, particularly the “triple lock” on the state pension.
The report said: "As our population ages, balancing the crucial role played by the state in retirement – especially in relation to lower income households – with fiscal sustainability will be an important consideration in the coming years."