In a new golden age of retirement, pensioners' incomes have climbed to a level almost rivalling that of workers' pay.
Pensioners' average weekly income was 38 per cent lower than that of the working age population in 1994-95. However, by 2014-15 the gap had lowered significantly to seven per cent, according to figures released today by the department for work and pensions (DWP).
After the deduction of direct taxes and housing costs the average income of all pensioners in 2014-15 was £297 per week.
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Younger pensioners are better off than their older counterparts, the DWP data shows. Under-75s have a higher average income after housing costs (AHC) of £348 per week, compared to over-75s who have £257 left over AHC. Recently retired pensioners, who were within five years of the state pension age, had the highest AHC weekly income of £363.
The DWP said this difference was not surprising, as younger pensioners were more likely to be in work or have benefited from the peak of occupational saving schemes in the late 1960s.
The rise in real earnings over the past few decades had also led to an increase in disposable income that could be saved into private pensions or invested.
Tom McPhail, head of retirement policy at Hargreaves Lansdown, said: “Today’s pensioners have worked hard for their prosperity and there are still areas of inequality, both regionally and in terms of age, with older pensioners having lower incomes.
“Nevertheless, this news is likely to exacerbate intergenerational tensions.
“A key component of pensioners' improving prosperity has been the state pension, which has increased from an average of £133 a week in 2004-5 to £161 a week in 2014-15."
In addition, the percentage of pensioners with over half their income from private sources increased 10 per cent from three out of 10 in 1994-95 to four in 10 by 2014-15.