Occupational pensions now make up 30% of retirees’ income, compared to 24% a decade ago, according to research from Equiniti.
Analysis from the administration firm showed that occupational pension income has risen 38% from £121 a week in 2008/09 to £167 a week in 2018/19.
On average, it accounts for 30p in every pound of total income of pensioner units – either single pensioners over state age or pensioner couples where one or more is over state pension age – which stood at £550 per week, or £28,600 annually, in 2018/19.
However, the largest source of income remained state benefits, which rose 10% from £217 to £238 per week over the same 10-year period and accounts for 43% of pensioner income.
Equiniti said all other income types remained the same, while earnings income dropped from £94 to £77 a week.
Duncan Watson, CEO, Equiniti’s pension business, said the figures were testament to the success of occupational pensions in helping retirees, and urged younger employees to continue making contributions to their workplace pension scheme.
Watson said: “Occupational pension income is the most rapidly growing source of funds for pensioners and is catching up income provided by the state as the most valuable in retirement. Many people may currently see their incomes stretched if they have been placed on furlough or are facing other financial difficulties as a result of the crisis. However, our fear would be that if a large swathe of employees seek to dip out of pension contributions for a short while it could harm positive behavioural attitudes that have become the norm since the introduction of auto-enrolment.
“Added to this, those who continue to invest as the market suffers from continued turbulence could benefit from upside as the world recovers from this unprecedented crisis and moves towards greater certainty.”
