UK retiree household income has increased by 77 per cent in real terms over the last 20 years, compared to just 49 per cent for non-retirees.
The gap between retirees and workers has closed more quickly since the recession, with average incomes up 14 per cent in real terms among retired households, compared to a 4 per cent fall among the rest of the population, according to figures from Canada Life, meaning the gap between retiree incomes and everyone else’s has never been so narrow
By 2025, retirees will receive 18 per cent of all UK household income compared to just 13 per cent in 1995, says the provider, an increase that is caused in part by the growth in number of retirees.
Canada Life’s inaugural Retire UK report shows the average income for a retired household now stands at £23,695 compared to £10,427 twenty years ago. That compares to the average non-retired household income of £47,555 today.
The report argues this is not just down to generous government spending on older people, but income from private and occupational pension schemes which has risen fastest, tripling in 20 years, outstripping income from state benefits, which has more than doubled, up almost 119 per cent.
Canada Life executive director of retirement income Richard Priestley says:“The financial firepower of the UK’s growing silver army has rocketed up in the last twenty years, as the rising population is combining with rapid increase in retirement income. Older people have higher incomes than ever before, both in absolute terms and compared to the wider population. Even during the recession average retired household incomes increased in real terms, while the wider population saw its living standards shrink.
“It’s clear that the current standing of living among retirees is better than ever. There are poorer groups too, but retirement is likely to be a more pleasant and comfortable life for most. At least for now. The UK’s younger people will find it much harder, and it is possible the next twenty to thirty years will see a peak in retirement living standards as newcomers begin to leave work with fewer assets and less generous pensions.”