Pensioner households earn more than those of working age

Pensioner household incomes have overtaken the incomes of working age households for the first time, a study has found.

OAP spending power has been boosted by a new wave of pensioners who have yet to retire, who own a home, and who receive generous pension pots, analysis by the Resolution Foundation for the Intergenerational Commission shows.

The As Time Goes By study, which follows income changes across several generations in the past 50 years, states that low growth for working age households has coincided with a surge in pensioner wealth.

After housing costs, typical pensioner households are now £20 a week better off than their working age counterparts, according to the report.

In 2001, pensioner incomes were £70 a week lower.

The study warns that with falling home ownership levels for millennials, low generational income growth and less access to pension schemes, it cannot be assumed that the trend will continue.

Adam Corlett, economic analyst at the Resolution Foundation, said: "One of the most intriguing aspects of the recent living standards story across Britain has been typical pensioner household incomes overtaking working age households for the first time.

"This has led some to assume that all pensioners are enjoying some kind of boom amid the painful squeeze for everyone else. The reality is quite different - the incomes of individual pensioners grow relatively slowly, particularly once they've stopped working.

"Instead, the main driver of pensioner income growth has been the arrival of successive new waves of pensioners, who are more likely to work, own their home and have generous private pension wealth than any previous generation.

"The big challenge we face as a society is to ensure that the record incomes that a new generation of pensioners are enjoying are not a one-off gift, and can endure for future generations too."