UK is becoming more equal – as incomes fall

 
Tim Wallace
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and female pensioners are becoming more equal, while poverty rates as a whole are declining, industry and official data showed today – but only because incomes are falling, cutting inequalities.

Men retiring this year only expect an income of £18,000 – down to a five-year low from £19,400 last year and £20,313 in 2009.

Meanwhile female income expectations declined more slowly from £12,900 last year to £12,250 this year.

That cuts the gap between male and female incomes by £750 to £5,750.

Prudential said that much of this fall is down to low annuity rates, caused by quantitative easing pushing down interest rates, and the overall weak economic outlook.

“The practical steps women can take to improve their retirement income prospects include maintaining pension contributions during career breaks,” said Prudential’s Vince Smith-Hughes.

Meanwhile figures from the Office for National Statistics yesterday showed average incomes fell through the financial crisis, also reducing inequality.

Median disposable income fell from £15,068 in 2008 to £14,488 in 2010.

As someone is defined as “at risk of poverty” if they are earning below 60 per cent of median income, the fall in incomes dragged down the poverty threshold by £348 per year, reducing the proportion from 19 per cent to 17.1 per cent.

However, despite this fall in incomes and in the gap between low and high incomes, the UK still has above-average poverty levels on this measure. In the EU as a whole, 16.4 per cent are at risk.