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Your support makes all the difference.Many working people face significant financial pressures: real incomes of the median worker have fallen by around 10 per cent since the economic downturn of 2008. For those struggling to make ends meet while still taking home a salary, the news that pensioners are now better off than ever before will be of little comfort. Yet it is, fundamentally, a welcome development.
After all, pensioner poverty in the UK has been a serious problem. Improvements in the state pension and other benefits for over-65s have helped to change that. Of course, many older people have also benefited from the remarkable strength of the housing market, which is skewed against the young. But nevertheless, it should be a matter of pride to social policymakers that pensioners can now enjoy life in the years after they finish work.
Moreover, in concluding that average incomes for pensioners now outstrip average incomes for the median worker, the Institute for Fiscal Studies made its comparison after housing costs and dependants had been taken into account. Since the middle years of life are more likely to be loaded with mortgages, toys and school trips, it should not be intrinsically concerning that the figures suggest pensioners have more disposable cash than many still in work.
There are, however, important caveats. Rising incomes for the median pensioner do not mean life is smooth for all. According to Age UK, billions of pounds in benefits due to older people go unclaimed each year and it is often the poorest who miss out. A recent report by the charity suggested that 900,000 pensioners are living in severe poverty.
Moreover, the cost-of-living crisis facing many working-age people will have a knock-on effect for them in their own later life: spiralling housing costs, in particular, make long-term saving hugely difficult and – for those who will rent rather than buy – continued housing costs into retirement are more likely. Unless these structural problems are addressed, retirement itself may no longer be a time in the future for many, but simply a thing of the past.
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