The Government’s ‘triple lock’ – which guarantees state pensions will rise by at least 2.5 per cent every year – has been a factor behind the growth in retirement incomes, the Office for National Statistics said, meaning that most pensioners did not experience a drop in income during the recession, when workers were hit by rising unemployment and wage falls.
Increasing numbers of people investing in private pensions or annuities has also contributed to the rise in pensioner living standards. Retired people had an average income of £21,000 in 2014/15 – meaning they were £1,500 a year or 7.7 per cent better off than they were in 2007/08, adjusting for inflation. Pensioners have seen their incomes nearly triple since records began in 1977, even once inflation was taken into account, while workers’ incomes have only doubled.
Pensioners are much less likely to rely on the state pension than in previous decades. Retired households have also grown increasingly reliant on private pensions, with them making up 43 per cent of incomes in 2014/15 compared to 18 per cent in 1977.
The Pensions Minister said the Government was ‘committed to helping people enjoy a financially secure retirement’ adding, ‘Supporting people after they have worked hard all of their lives will continue to be a priority, especially as it can difficult for people to increase their incomes in retirement.’ Enable’s IFAs feel the same.
Source: This is Money
Issued by: Enable Independent Financial Life Planners • 25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority. It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us. NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE
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