In spite of challenges faced by the over 60s looking to generate an income in retirement, income levels have risen faster over the last 30 years than for any other age group according to a report by the Institute for Fiscal Studies (IFS).
The study, funded by the Joseph Rowntree Foundation, found that median incomes for over-60s grew by 2-3% between 2007/8 and 2011/12, while people in their 20s saw their average income shrink by 12% over the same period.
The IFS suggests that this disparity can be put down to low or frozen wages and high unemployment, compared to the relative stability of benefits like the state pension. The study also found that pensioners are the only group to be better off now than they were in 2007/8.
David Phillips, a senior research economist at the IFS, said “The face of poverty has become much younger in recent decades.” He added that “it is young people who have suffered most as a result of the recent recession and who are now at risk of falling further behind.”
The IFS doesn’t, however, claim that all pensioners are wealthy. The report also found that pensioners are still more likely to be in the poorer half of the population, and around 4 million pensioners are living in fuel poverty.
Michelle Mitchell, Director General of the charity Age UK, argued that “while it is true that some older people have seen their incomes rise in recent years, there are still huge inequalities prevalent within the older generation as well as the general population as a whole.”
The DWP welcomed the findings of the report and said:
“These statistics show that progress has been made”, Phillips urged the government to act on the findings: “It is important that policymakers and politicians understand these profound changes to patterns of low income and respond accordingly.”