Average weekly pensioner income sat at £349 at the end of the 2022 financial year, an increase of almost £100 since 2002, figures have revealed.
According to government figures released yesterday (August 30), in 1995, the average pension income was £176 and rose to £335 in 2010.
In the 10 years from 2010 to 2020, pensioners had similar average incomes at £335 and £347 respectively.
However, the average income increased to £376 in 2021.
In FYE 2022, pensioners had an average income of £349, which was a significant increase from FYE 1995 but had declined from the previous year due to factors affecting the dataset such as coronavirus.
Source: Gov pension income data, median average (adjusted for inflation)
Alice Guy, head of pensions and savings at Interactive Investor, said: “On average pensioners are wealthier than ever before.
“Increasing pension incomes reflect the increasing state pension and also the boom of workplace pension schemes during the 1950s and 1960s.”
The data revealed that around £56 of the pension income increase is due to higher benefit income.
The pension triple lock was introduced in 2010 as a guarantee the state pension would increase by the higher of average wages, inflation or 2.5 per cent.
Pensioners also enjoyed a £90 increase in workplace, private pension and investment income on average during the past 20 years.
Interactive Investor said the state pension triple lock and increasing workplace and private pension wealth has lifted millions of pensioners out of poverty.
However, there is a growing pension divide as the poorest fifth of single pensioners now receive 20 times less workplace and private pension income than the richest fifth.
Single pensioners in the bottom fifth, received £18 per week workplace and private pension income, compared to £366 for those in the top fifth.
Pensioner couples in the bottom fifth, received £42 per week workplace and private pension income, compared to £755 for those in the top fifth.
Source: Gov pension income data, mean average (adjusted for inflation)
Someone retiring on the basic state pension in 2002 only received the equivalent of £128 today, compared with £204 each week for someone now on the new state pension.
“Despite rising average pension incomes, there’s also an increasing pension wealth divide, and it’s mainly due to workplace and private pension wealth, with pension couples in the top one-fifth receiving 17 times as much private pension income as those in the bottom fifth and single pensioners in the top one-fifth receiving 20 times as much private pension income as those in the bottom fifth,” Guy said.
“This pension divide is because although older-style final salary workplace pensions were extremely generous, they were only enjoyed by some workers.”
Guy explained that pensioners are more likely than today’s workers to have to pay into a final salary pension scheme, but until recently, there were also many workers with no workplace pension at all.
“Workplace pensions were only required for all employers when auto-enrolment rules were introduced in 2012,” she said.
“The good news is that nearly all employees are now entitled to a workplace pension, so this pension divide is likely to be reduced.
“The bad news is that today’s workers are much less likely to enjoy generous workplace pension wealth in retirement.”
