1.4 million UK pensioners working to supplement retirement income

The latest Pensioners’ Income Series figures from the Department for Work and Pensions have revealed that more of the UK population are working in their retirement years to supplement their incomes.

The total of all single pensioners and couples receiving income from earnings last year was 17% compared to 12% in 1997-98. This means that at least 1.4 million pensioners are still working in retirement.

The reports also revealed that pensioner couples are more inclined to rely on earned income with 29% being in receipt of income from earnings last year. This compares with 22% in the same period ten years ago.

Income from earnings now accounts for 10% of average gross pensioner income compared to 8% for 1997-98. Income from state benefits (including state pension) increased over the period by 22%, however income from benefits still remains the highest contributor to pensioner income, providing 48% of pensioner income.

Dean Mirfin, Key Retirement Solutions Group Director, said:

“The worrying trend that these new figures show will not come as a surprise to anyone, which is that state support is decreasing and pensioners are having to be more self reliant. With falling retirement provision ahead we expect that the percentage of income coming from the state will fall further behind the cost of living. Of further worry is the widening gap between pensioners net and gross income, showing that taxation of our older population is rising. The net increase in income has fallen 5% below the RPI over the period, a strain which many pensioners increasingly will struggle to bear.”

“Many pensioners understandably are also turning to equity release to help fund their retirement income. Equity release allows those with wealth tied up in their homes to unlock that wealth for their benefit. A typical release of equity could produce an additional weekly income of over £78, equating to an increase in average net pensioner income of over 25% from £308 per week to £386.”