Moreover, male single pensioners had a higher average income than their female counterparts, with the latest data signalling a £27 or 9% difference per week. Each year that equates to a £1,404 income gap.
Damon Hopkins, Head of DC Workplace Savings at leading independent consultancy Broadstone, said: “Today’s data shows that pensioner incomes increased through 2023, boosted by the 10.1% increase to the State Pension that fed through in April 2023.
“Despite the increase, worrying questions remain around adequate retirement provision. While a single pensioners income was £267 a week, or £13,884 a year the absolute bare minimum needed for an adequate standard of living according to the PLSA’s Living Standards was £14,400 a year – highlighting a £516 shortfall.
“Auto-enrolment is nudging more workers to contribute towards their retirement pot and begin to ramp up their savings, but it is clear that continued and varied action is required, particularly around employee awareness of what their future provision might look like.
“Pension savers cannot rely on a “triple-locked” State Pension to provide their retirement income, it is a great base, but not enough and is coming later and later – so it is key they are saving for as long as possible, as much as possible and people check their investments are performing well, and they are able to make informed decisions at the point of decumulation.
“The whole industry has a role to play in driving such change for the benefit of this new generation of defined contribution savers – there is hope, but we cannot rest on our laurels.”
Claire Altman, Managing Director of Individual Retirement at Standard Life: “It’s clear pensioners are using a diverse range of income sources in retirement which only adds to the complexity of managing this income. Almost three-quarters (70%) are reliant on income from a private pension, and around half (56%) received income from investments. However, the figures also show a continued heavy reliance on more secure income sources. The State Pension continues to make up a significant portion of overall income, with 98% of pensioners in receipt of it. Furthermore, 62% of pensioners receive income from a DB pension. These figures echo our research, which reveals a large proportion of this retirement income continues to come from more secure income sources.
“We also know this picture is changing, with only 9% of DB schemes open to new entrants and defined contribution schemes set to take over in the coming years. This changing retirement income environment reinforces the important role the wider industry must have in helping people maximise their pension savings in retirement and helping them make the right choices about the retirement income solutions for them. This may involve having an element of guaranteed income to cover essential spending, and keeping some savings accessible, to be used flexibly and invested for growth – but ultimately the focus is increasingly on meeting individuals’ income needs as highlighted in the recent FCA Retirement Income Advice review.
“These figures also continue to show big differences between the haves and the have-nots when it comes to pensioner household income. The bottom fifth of pensioner couples have an average annual income of £15,340, compared to the top fifth of pensioner couples, who report an average annual income of £60,788, once housing costs are removed. This is a significant difference. Additionally, for pensioner couples in the bottom fifth, benefit income including the State Pension, was the largest source of income, making up 78% of their income. Those in the top fifth, on the other hand, are more reliant on generous defined benefit (DB) pension provision, which makes up 39% of their income.”
Pensioner Incomes 1995-2023
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