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Last Updated: Friday, 7 December 2007, 12:35 GMT
Pensioners 'getting better off'
Elderly ladies
There is a wide variation in incomes among pensioners
Pensioners have become better off in the past decade, official figures show, with average incomes rise by more than a third above the inflation rate.

Figures from the Office of National Statistics (ONS) show that, from 1994/95 to 2005/06, gross pensioner incomes rose by 37% in real terms.

By contrast, workers' average earnings rose by just 18% above inflation.

State benefits, including the state pension, provided most of the income of the average UK pensioner.

Figures compiled by the ONS show that, in 2005/06, the average weekly income among male pensioners was 257 and 229 for women.

For men, state benefits contributed nearly 55% of that, while female pensioners received nearly 65% of their income from the state.

Gordon Lishman, director general of Age Concern, said: "The basic state pension is an incredibly important part of older people's incomes, particularly for the poorest pensioners."

"Yet despite this, increases to the State Pension have not kept pace with rises in earnings and its real value is declining."

Rich and poor

Company pensions were the second largest source of pensioner incomes, while other sources of money, such as continuing earnings, investments, and personal pensions, contributed relatively little to the average pensioner's income.

The figures, part of an update to the ONS publication "Pension Trends", confirm the wide variation in incomes among pensioners.

Pension credit guarantee... simply isn't getting through to the people who need it
Anna Pearson, Help the Aged

The poorest 20% of single pensioners received just 100 a week in 2005/06, while the top 20% got more than 300 per week.

Among pensioner couples, the poorest 20% received less than 200 per week, while the most prosperous 20% got well over 600 per week.

Anna Pearson, at Help the Aged, said that more than two million older people were still living in poverty.

"For the poorest fifth of single pensioners, average incomes are well below the Government's pension credit guarantee level - so this benefit simply isn't getting through to the people who need it," she said.

Recent retirees

The ONS figures also reveal the extent to which recent pensioners are substantially better off than those aged over 75.

In 2005/06, recently retired pensioner couples (defined as those where the head of the household is less than five years over their state pension age) had gross average incomes of 558 per week.

However those couples aged 75 and over had average weekly incomes of just 381.

The main reason for this drop is the tendency of some younger pensioners to still be working and earning, a trend that fades away with age.

Thus the average recently retired couple still earned an average of 139 a week, but those couples aged 75 and over earned only 10.

"This difference is [also] partly due to the declining value of the basic state pension over time," said Anna Pearson.

"If the Government linked the basic state pension to earnings in this year's budget, 100,000 pensioners would be taken out of poverty by 2017," she said.

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