The number of retired households relying on income from private pensions is growing, the ONS reported yesterday (8 August) with an increase in the gap between the incomes of those who have private pensions and those who do not.
Inequality of income among retired households has also shown small increases in recent years.
Although state pension income has almost doubled in the analysed period, over half of the increase in the gross income of an average retired household is due to an increase in private pensions income, which is around seven times as high in 2015 to 2016 as it was in 1977.
Private pensions represent 42.8 per cent of the total average annual gross income in 2016, an increase of almost seven percentage points when compared with 2006 figures.
The statistics also revealed pensioners enjoyed a golden era between 1977 and 2016 with incomes nearly tripling in real terms, rising much faster than the incomes of working people.
The average gross income for a pensioner household soared to £29,000 in 2016 from £10,500 in 1977, after the figure was adjusted for inflation, according to the Office for National Statistics. Over the same period the gross income for working households doubled from £20,200 to £41,900.
Mel Kenny, chartered financial planner for London-based Radcliffe & Newlands, said: “These figures are not surprising and should be taken as nothing else but to continue encouraging people to save.
“To use the figures as a gauge for the state of the nation is dangerous because it distorts the real picture including regional variations.”
Morten Nilsson, chief executive of Now: Pensions, said: “The prospect of living on just the basic state pension, at less than £160 a week, is a salutary reminder for those that opt-out of workplace pensions, foregoing employer contributions and tax relief as well as their own savings.”