Pensioner incomes show fastest growth

Retired people's incomes have experienced rapid growth to become the fastest-rising over the last 10 years, new findings reveal.

Research by the Institute for Fiscal Studies (IFS) found that the incomes of pensioners have jumped by almost a third (29.4%) since 1999, compared with a rise of 26% for working people.

It found that over 40% of retirees currently feature in the top half of the income scale, in contrast to two decades' ago when 25% were in the same bracket.

According to the IFS researchers, state and private pensions have grown for newly-retired people while tax and benefit reforms by the previous Labour government have helped to increase their gains.

The team behind the Nuffield Foundation-funded study advised that cutting back entitlements for older people could help to fund social care reform plans, estimated to cost £1.7 billion, as pensioners currently stand to reap the most benefit from the reforms.

Michelle Mitchell, charity director general at Age UK, said: 'We welcome debate around how to set up a sustainable funding structure for social care to ensure that both current and future generations of older people receive the care support they need in later life without facing the prospect of losing everything they have worked for.

'However we must remember that the number of pensioners in poverty remains at 1.7million,over half of households living in fuel poverty are older, and the recently retired have seen annuity rates plummet over the last few years meaning they will have a much lower income than they might have anticipated during their working lives.'

Copyright Press Association 2012