For pensioner couples, it means that incomes are still lower than in 2014/15 (£808 a week) with single pensioners still at roughly the same income level as in 2016/17.
The reliance on the State Pension and other benefits was also exposed with the State providing 56% of single pensioners’ income and 38% of pensioner couples’ income.
Damon Hopkins, Head of DC workplace savings at independent consultancy Broadstone, commented that the figures raised concerns over a stagnating or declining standard of living in retirement and said a pensions adequacy crisis is looming as more Defined Contribution savers begin to reach retirement.
He said: “The incomes of the UK pensioners fell in 2021/22 while the State Pension and other benefits once again accounted for a significant proportion of pensioner incomes. It suggests large numbers of pensioners in the UK are suffering from a declining standard of living as their incomes fail to keep pace with inflation.
“The State is already providing a significant chunk of retirees’ incomes and outsized increases to the State Pension of 3.1% in 2022/23 and 10.1% in 2023/24 look set to further embed the importance of the State Pension in people’s retirement.
“A pensions adequacy crisis is now looming large – a toxic mix of declining generous Defined Benefit pensions, inadequate savings in Defined Contribution pensions, investment market volatility and high inflation means retirees will become even more reliant on a triple-locked State Pension.
“The latest projections suggest that 12.5 million working aged people are under-saving for retirement with the nation sleepwalking towards a retirement adequacy crisis. While we still face economic challenges in the short- to medium term, it’s imperative we don’t lose sight of the need for people to save more – this needs to be a combined Government, industry and ‘UK plc’ effort to ensure as many people as possible can realistically achieve a comfortable retirement.
“This, coupled with better innovation and governance around investment strategies, have to be priorities to complete the auto-enrolment success story.”
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