Pensioner incomes stagnate over last decade

31st March 2025 by RetireEasy





Median pensioner incomes have fallen to their lowest level since before the pandemic – and appear to have effectively stalled over the last decade.

Pension sector leaders are raising concerns about the future retirement prospects of a large swathe of the UK public following statistics that show pensioner incomes stagnating, and becoming increasingly reliant on State Benefits that could, at some point in the future, be means tested.

The latest DWP Pensioner Income Series shows that the median income after housing costs for all pensioner units fell from £410 a week in 2022/23 to £407 a week in 2023/24. This is the lowest it has been since 2019/20, when it was £406 a week.

David Brooks, Head of Policy at Broadstone, commented: “Given the significant increases in the cost of living over the past few years, it suggests that pensioners are likely to be seeing declines in their standard of living as their household budgets become increasingly stretched.”

The figures also show how dependent many pensioners are for their income on benefits: 56% for single pensioners, while for pensioner couples it was 37%.

Added David Brooks, “This is likely to lead to speculation that the means-testing of the state pension could be considered by the Government to ensure the spend on state benefits is targeted on those that need it most.”

Meanwhile, average gross incomes for all pensioner households in 2023/24 were just £688 a week – compared to £686 in 2014/15 when adjusted for inflation.

Stephen Lowe, group communications director at Just Group, commented: “The figures reinforce the message that building up a private pension is the key to having a better standard of living later in life. It also underlines the importance of people approaching retirement to think carefully about how to generate a sustainable income.”

Mike Ambery, Retirement Savings Director at Standard Life, said: “Pensioners continue to draw on a range of income sources in retirement, making the task of managing their retirement finances more complex than ever.

“With defined benefit schemes in steady decline and defined contribution schemes set to take over in the coming years, the need for a more diverse range of retirement income solutions to help people maximise their DC pension savings has never been greater.

“Having an element of guaranteed income can play an important role, providing certainty and security that essential spending is met, while keeping some savings accessible and used for growth – such as in a smoothed managed fund which helps dampen the impact of day-to-day market fluctuations – can provide the flexibility and potential growth that individuals also seek.

“However, ensuring good outcomes at retirement remains one of the big challenges faced by the pensions industry, and we must go further to help the 90% of consumers who can’t or don’t seek financial advice.

Carolyn Jones, Retirement Director at Scottish Widows, commented: “Our latest Retirement Report predicts 38% of people are not on track for even a minimum retirement lifestyle.

“For those approaching retirement, to combat the tougher retirement climate, planning early is vital as well as regularly evaluating your current pot to ensure it is working its hardest.

“Knowing exactly how much money you have, and therefore any shortfall you need to make up, can be hugely empowering and motivating for the future.”
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