Retirees have seen the fastest growth in their disposable income over the past year, new data has revealed.
By April 2018, the average retired household has a disposable income of £23,239, a rise of 1.45 per cent on the previous year’s figures.
By comparison, the disposable income of non-retired households grew by just 0.64 per cent over the same period, giving the average working household £30,846 in spare cash.
The data was released by the Office for National Statistics (ONS), which defines ‘disposable income’ a “the amount of money that households have available for spending and saving after direct taxes have been accounted for.”
According to an ONS analysis of income inequality in the UK, retirees have not had so much disposable income since the 2001/2, when income inequality began to fall.
“Looking at the results for all households, the 1980s were characterised by a large increase in inequality of disposable income, particularly during the second half of that decade,” read the ONS report. “Following that rise, inequality of disposable income reduced slowly from 1990 until the mid-1990s, although it did not reverse the rise seen in the previous decade. In the late 1990s, income inequality rose slightly before falling in the early 2000s.
“Since the turn of the millennium, changes in income inequality have been relatively small compared with previous decades.”
However, the ONS data was used by some analysts as proof of the growing income disparity between older and younger generations.
“The higher rate of increase in pensioner incomes will do little to calm calls for greater fairness between the generations,” said Nathan Long, senior pension analyst at investment platform Hargreaves Lansdown.
“Whilst incomes in retired households are increasing at a greater rate, non-retired households still have the greater income available after taxes as you’d expect.
“The income includes payouts from pensions, so whilst stagnating wages and generous state pension increases will be responsible in part, so too is the rush to access pensions that has happened since new, more flexible, pension rules were introduced.
“It is important to remember that the average ignores the fact there are many pensioners getting by on very low incomes.”