Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
Quick links:
  • Home
  • The Actuary Issues
  • June 2016
06

Pensioners' incomes almost the same as workers' 

Open-access content 30th June 2016

The gap between the incomes of pensioners and people of working age has narrowed over 20 years, according to official figures.

A pair of hands of an old man working © iStock

30 JUNE 2016 | CINTIA CHEONG

Produced by the Office for National Statistics and the Department for Work and Pensions, the analysis found in 1994-95 pensioners' average net income per week was 38% lower than that of the working age population. By 2014-15 it was just 7% lower.

Commenting on the findings, Fiona Tait, pensions specialist at Royal London, said the reduced gap was probably due to younger pensioners continuing to work. 

"Longer working lives look to becoming more the norm," she said. 

"What is not clear is whether these people are working because they want to, or because they have to in order to supplement their income. This suggests people may be better off with a plan that is based on a more realistic retirement age, with a contingency for not being able to work."

Tom McPhail, head of retirement policy at Hargreaves Lansdown, said the findings could exacerbate intergenerational tensions. 

He said: "A key component of pensioners' improving prosperity has been the state pension, which has increased from an average of £133 a week in 2004/05 to £161 a week in 2014/15. 

"The continued use of the triple lock may come under increasing pressure, if only to refocus state pension resources on the over-75s who have the greater need."

The analysis also revealed people increasingly relied on private sources of income. 

The percentage of retirees with over half their income from private sources has increased from 30% to around 40% between 1994-95 and 2014-15.

Tait advised people to make additional savings if they wanted to maintain their standard of living in retirement. 

"Benefit income, such as the state pension, is designed to provide a basic level of income, not to replace earned income," she said.

 

She added that automatic enrolment would help people to secure additional income but contribution levels would "almost certainly have to be higher than the bare minimum".

This article appeared in our June 2016 issue of The Actuary.
Click here to view this issue
Filed in:
06
Topics:
Pensions
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Director of Investment Risk

London (Central)
+ comprehensive benefits
Reference
118783

Qualified Reporting and Process Improvement

London (Central)
£90,000 - £100,000
Reference
118762

Risk Actuary

London (Central)
Market Rates + 20% bonus + benefits
Reference
118782
See all jobs »
 
 

Most-Popular

 
 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2020 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited, Level 5, 78 Chamber Street, London, E1 8BL. Tel: 020 7880 6200