Pensioners have never had it so good

Generous pensions, valuable property, and protected benefits: life is good for pensioners

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The traditional image of a pensioner is of an elderly person, shivering in their cold home, and weighing up whether they should spend their last pennies on running a bath or buying some more beans. The reality for the vast majority couldn't be further from the truth.

A study for the Institute for Fiscal Studies recently revealed that pensioners are less likely to be poor than any other group in society: in fact pensioners have never had it so good.

The study highlighted that pensioners have seen their income grow faster than the rest of society over the past 30 years, thanks to several striking social trends. The first is the fact that current pensioners are living off astonishingly good occupational pensions.

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Generous workplace pensions were widespread in the 1960's, 1970's and 1980's - so for the majority of their careers. By the time less generous defined contribution pensions became more common in the 1990s and beyond, most of this age group were safely ensconced in a final salary scheme and protected from the changes.

Of course, those who were locked out of final salary pensions, and have been forced to buy an annuity will be furious - just as those who decided to rely on the interest from savings to pay their way in retirement will not be happy at how things worked out - but the majority of retirees are sitting pretty on their gold-plated pensions.

In many cases pensions were so generous that they allowed current pensioners to retire early. In 2011, for example, 8.3% of men retired between the ages of 50 and 55, and another 14% left work by the age of 59. By the age of 64, more than half of the workforce had retired. Compare this to the average person in their 20s, who is set to have a state pension age of 70, and little occupational pension to speak of. Their chances of retiring in their 60s looks remote - let alone their 50s.


Current pensioners have also done incredibly well from property price trends during their working lives. Research by Prudential last year found that more than one in ten pensioner households are worth more than £1 million - that's a greater proportion than any other age group - and rocketing house prices have played their part.

People in their 60s own a quarter of all property in the UK, and pensioners as a whole own more than £800 billion worth of property. They reaped the benefits of being able to buy into the market when houses were worth a tiny fraction of what they are now. Some also took advantage of their freedom to buy their council house at an enormous discount, so they could benefit from the boom with very little outlay. Now they are able to cash in by downsizing or releasing equity.

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Finally, pensioners are reaping the rewards of being the only large group of reliable voters. It means that the political parties are falling over themselves to keep pensioners happy. And while every other group requiring state help has seen payments frozen or cut, pensioners have been guaranteed the triple lock - which means state pensions will rise with prices, earnings, or 2.5%, whichever is higher - and they have been offered generous universal benefits into the bargain.

In all, the Institute of Directors points out that the average pensioner is now richer than 40% of the population.

It's not a hugely contentious statement that pensioners have never had it so good. This has been something we've been able to claim for generations - as living standards have always climbed with each subsequent generation.

The worrying trend is that for anyone born after 1965 this is no longer the case. Research by the Financial Times in 2012 found that for the first time, people aged under 50 can look forward to a harder retirement than those who came before them - so that not only have pensioners never had it so good - but there's a very good chance that they'll never have it so good again.

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