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Pensioners are earning £100 more each week in real terms compared with two decades ago, official data suggests.
Retirees received an average of £250 from their pensions, benefits and investments in 2002. This has risen to £349 as of 2022, government figures show.
Around £56 of this increase is thanks to both higher benefit income and the triple lock on the state pension, according to analysis by the broker Interactive Investor.
The Conservatives’ triple-lock policy promises to increase the state pension each spring by the highest of the previous September’s consumer prices index inflation rate, wage growth or 2.5pc. This year, the new state pension rose by a record 10.1pc, surpassing £10,000 for the first time.
Alice Guy, of Interactive Investor, said such generous rises meant that on average pensioners are now wealthier than ever before.
“Increasing pension incomes reflect the increasing state pension and also the boom of workplace pension schemes during the 1950s and 1960s,” she said. “There are now more pensioners in the top fifth of households in terms of income, 19pc in 2022 compared to 13pc in 1995.
“The triple lock and the introduction of a more generous state pension system in 2016 have both significantly boosted the state pension incomes. Someone retiring on the basic state pension in 2002 only received the equivalent of £128 today, compared with £204 each week for someone now on the new state pension.”
However, Ms Guy noted there was stark inequality among pensioners, with those in the bottom quintile earning 20 times less than the top quintile. The lowest earning pensioners took home just £18 per week on average, compared with £366 in the top fifth.
“This pension divide is because although older-style final salary workplace pensions were extremely generous, they were only enjoyed by some workers,” she said. “The good news is that nearly all employees are now entitled to a workplace pension, so this pension divide is likely to reduce.
“The bad news is that today’s workers are much less likely to enjoy generous workplace pension wealth in retirement. This means, we may soon see a peak in workplace pension wealth as many future retirees will have a much lower workplace pension income.”
In 2012, there were 12.8 million people with some form of entitlement to a defined benefit pension in the private sector. By 2022, this figure had fallen to 9.7 million, according to the Pensions Regulator.
The rising cost of living has put even more pressure on the poorest pensioners this year.
A single person needs an annual income of at least £12,800 to cover their basic needs and live with dignity, according to the Pensions and Lifetime Savings Association. That is 18pc higher than last year, and the highest percentage increase on record.