Pensioner pay increases by 50%

Average gross incomes for pensioners have increased by an estimated 50% in real terms over the last 16 years, according to research by the Office for National Statistics.

The Pension trends 2012 report found that occupational pensions were a “significant” source of income for pensions. The other source of income is benefit income which includes state pension and housing and disability benefits. As many as 1.9 million pensioner households live on benefits alone.

Despite an increase in the income levels for pensioners, current workers still need to continue to save more for their retirement.

Raj Moody, head of pensions at PricewaterhouseCooper, warns: “Despite retired households now generally being in a better position, people yet to become pensioners still need to be doing more to save enough for a comfortable retirement.

“For most current workers, relying on pension payouts from their workplace schemes and the state will not be enough for the type of retirement they might expect to enjoy.”

He adds that even with pensions auto-enrolment, workers should not expect to receive as much from their employer’s workplace pensions as older generations are receiving.