Pensioner income has dipped to its lowest level since before the pandemic, new data from the Department for Work and Pensions has revealed.
Average pensioner income fell from £410 in 2022/23 to £407 per week in 2023/2024. It is the lowest income level since 2019/20, when income was £406 per week, and up just £15 compared to £392 in 2010.
The data showed a significant difference in pension income between older and younger pensioners, with pensioners under 75 receiving an average weekly income of £455, while pensioners over 75 received an average income of £372 per week.
Benefit income, which includes State Pension, was the largest component of total gross income for both pensioner couples and single pensioners, the DWP said. This was 56% for single pensioners, while for pensioner couples it was 37%.
Thomas Lambert, financial planner at Quilter, said: “When compared to the steep rise from £206 in 1995 to £392 in 2010, it is clear there has been a marked slowdown despite the considerably higher cost of living.
“While real terms income levels have stalled, a far smaller percentage of pensioners received income related benefits in 2024, sitting at 20%, down from 31% in 2010 and 37% in 1995. This decrease highlights the impact of rising incomes from the State Pension and private pensions, reducing eligibility for benefits.”
Lambert said that while the triple lock has come under “increasing scrutiny” for placing a growing burden on the government, pensioners continue to rely heavily on it.
He added: “It seems clear that the state pension is still heavily relied on, and pensioner incomes might not have been able to hold level with 2010 for so long without its support. What’s more, as the coming generations move into retirement and the age of defined benefit schemes comes to an end, it is likely to reveal a significant gap in retirement provision and pensioner incomes may decline as a result.
“We appear to be nearing a juncture where there will soon be an inevitable review of the triple lock. However, any change must be handled carefully. The state pension is the single largest area of welfare spending and a vital source of income for millions.”
David Brooks, head of policy at Broadstone, commented: “Given the significant increases in the cost of living over the past few years, it suggests that pensioners are likely to be seeing declines in their standard of living as their household budgets become increasingly stretched.
“The data highlights the importance of the state-provided financial support, including the State Pension, which accounts for the majority of income for single pensioners and over a third of the total income for couples.
“In the context of plateauing incomes, the triple lock is clearly playing an important role in supporting the day-to-day household finances of less wealthy retirees.”
Brooks said reliance upon the triple lock is likely to lead to speculation that the means-testing of the state pension could be considered by the Government to ensure the spend on state benefits is targeted on those that need it most. However, he warned this would “only introduce further complexity into a system that should be as simple as possible.”
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