Pensioners’ incomes beat inflation
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
British pensioners have seen their income grow for the first time in real terms in 3 years – with the triple lock protection of the State Pension and more older people choosing to stay in work.
New official statistics show that, in 2012/13, average gross incomes of pensioner couples and singles grew to £477 – an above inflation rise – with state benefits accounting for 44% of the total.
The government’s State Pension triple lock ensures that pensioner incomes are now protected against inflation – increasing each year by whichever is the highest out of prices, average earnings or 2.5%.
Last year this meant that the Basic State Pension increased by 5.2% and Pension Credit by 3.9%, compared with the 3.1% increase in Retail Price Index (RPI) inflation.
The Pensioners’ Incomes Series for 2012/13 also reveals that, over the past 14 years, average net incomes for pensioners after housing costs have been taken into account grew by 37% in real terms. Contributing to this rise is a greater number of pensioners choosing to remain in work, with earnings among this age group growing by 62%.
Minister for Pensions Steve Webb said:
I am proud of our work to protect pensioners, the success of which is borne out in these figures.
The triple lock has marked a profound shift in how the state supports pensioners and it means that 12.7 million people will be over £400 a year better off by the end of this Parliament.
Alongside the guarantee of a strong State Pension, we are also seeing more older people choose to phase their retirement in a way which suits them. This government’s historic decision to end the discrimination of the mandatory retirement age has made that possible for thousands of people.
Figures released today show:
- benefit income, which includes the State Pension, has increased by 27% since 1998/99
- in 2012/13 state benefits accounted for 44% of pensioners’ incomes, occupational pensions made up 27%, earnings 17%, investment income 7%, and personal pensions 4%
- since 1998/99, the fastest growing sources of income are earnings, which has increased by 62% in this time, and personal pension income, which has increased by over 250%
- 28% of pensioner units (single pensioners or couples) received at least one income-related benefit in 2012/13, such as Pension Credit, Housing Benefit or Council Tax Benefit
- 22% of pensioner units were in receipt of disability benefits – pensioner couples received an average £88 a week from disability benefits in 2012/13 compared with £69 for single pensioners
The triple lock builds on the government’s ongoing protection of key benefits for older people including:
- free eye tests
- free NHS prescriptions
- free bus passes
- free television licences for those aged 75 and over
- Winter Fuel Payments
Cold Weather Payments were permanently increased from £8.50 to £25 in 2010.
Between 2011/12 and 2012/13, gross mean income grew from £475 to £477. Net mean income before housing costs grew from £395 to £397 and net mean income after housing costs grew from £363 to £364.
Mean net income after housing costs has risen faster than before housing costs. After deducting housing costs, mean net income has grown by 37% since 1998/99 compared with 32% before housing costs.
Pensioners’ mean net income has grown faster than incomes for the whole population over the last 14 years.
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