Pensioner income from occupational schemes falls for first time since 2005

James Phillips reports...

The proportion of pensioner income comprised of occupational pension payments fell over the 2017/18 financial year, government statistics reveal.

Across all pensioner households, occupational pensions provided, on average, a 27.8% of gross income in the last full tax year, compared to 29.9% the year before, the Department for Work and Pensions (DWP) said.

In its 2017/18 publication of its Pensioners’ Income Series, the department found a similar story was played out in terms of monetary value, reducing from £160 a week to £148, the first fall in average weekly income since 2005/06.

Drops in income were also recorded when split between single pensioner households and pensioner couples, with single households facing the biggest cut.

For the former, the proportion of gross income fell from 27.6% to 25.1%, or £97 per week to £83; for the latter, the proportion reduced from 31.0% to 29.2%, or £228 to £219.

While couples saw their overall gross income climb by £15 per week over 2017/18, pensioner households, on average, saw a £3 per week fall, while single households were hit with a £20 per week cut.

The fall in come corresponded with a fall in pensioners in receipt of an occupational pensions. In the 2017/18 year, 59% of all pensioner households received funds from a workplace scheme, compared to 62% the previous years, with weekly income reducing from £259 to £254.

The drop was starker when only including recently-retired households, where those in receipt of an occupational pension fell from 61% to 55%, with weekly incomes reducing from £317 to £304.

Across the board, pensioner incomes have remained fairly stagnant since the start of the decade. Hargreaves Lansdown senior analyst Nathan Long said this was evidence incomes were “flatlining, not falling”.

He said: “There’s yet more evidence that pensioners are being punished as a result of quantitative easing, with income from savings and investments on the slide.”

He continued: “The data so far shows that semi-retirement is gathering pace fairly slowly as defined benefit pensions are still supporting more traditional retirements.”

Some 17% of people in receipt of the state pension were continuing to work, with an average income of £339 per week.