The income gap for pensioners has almost doubled over the past 10 years, with those in the richest households seeing their private pension income grow at a far faster rate.
New figures from the Office of National Statistics show that in 2010 the ‘gap’ between the richest and poorest pensioner households stood at around £20,000. Today it is closer to £37,000.
Those in the poorest fifth, in terms of overall household income, have seen their private pension income rise from £1,472 to £2,260 since 2010. In contrast those in the richest fifth have seen private pension income jump from £22,422 to £38,940.
AJ Bell senior analyst Tom Selby says: ““While much attention has been paid to income inequality in the workplace, less has been said about those who are drawing a retirement income.
“The pension incomes of the richest retirees are now 17 times higher than those of the poorest. We truly live in a nation of pension ‘haves’ and pension ‘have nots’.”
He says that this issue should be part of government plans to address inequality across the country.
He adds: “It has become increasingly clear in recent years, and particularly in the aftermath of the EU referendum, that the UK is a divided nation, with the better off getting even better off as large sections of the population struggle to make ends meet.”
Selby adds that while automatic enrolment should help future retirees avoid penury in their later years, for most people it will only serve to provide a basic level of income in retirement.
“With no guarantees of how much the state pension will be or when it will be received in the coming decades, anyone wanting to avoid becoming a pension ‘have not’ needs to take responsibility by saving as much as they can afford today.”
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