03.07.14

Pensioners' Incomes Beat Inflation

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 per cent 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 per cent.

Last year this meant that the Basic State Pension increased by 5.2 per cent and Pension Credit by 3.9 per cent, compared with the 3.1 per cent increase in Retail Price Index (RPI) inflation.

Figures released on 2 July 2014 show:

  • in 2012/13 state benefits accounted for 44 per cent of pensioners’ incomes, occupational pensions made up 27 per cent, earnings 17 per cent, investment income 7 per cent, and personal pensions 4 per cent
  • since 1998/99, the fastest growing sources of income are earnings and personal pension income
  • 28 per cent  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 per cent of pensioner units were in receipt of disability benefits