WORKING incomes have been hit much hardest by the UK’s economic torpor since the financial crisis, while pension income appears to have weathered recession and stagnation much more successfully.
Sobering research released by the Office for National Statistics (ONS) yesterday shows that while the median incomes for retired households grew 5.1 per cent in real terms between 2007-08 and 2011-12, the amount going to typical working families has shrunk. Median incomes for non-retired houses are down 6.4 per cent in real from where they were at the onset of the financial crisis.
This means the gap between a typical retired person’s budget and that of someone who is not in work has shrunk, as retired incomes catch up. In 2012 pounds, there is now only a £6,418 gap, in comparison to a £9,664 difference in favour of workers in 2006.
Cash benefits have also risen as a proportion of income for the middle fifth of non-retired households, up from £3,100 to £4,600 in real terms over the same five year period.