Elderly Britons See Incomes Rise as Young Get Squeezed
Britons over the age of 60 have continued to see their incomes rise since the recession, while earnings for those in their 20s slumped, the Institute for Fiscal Studies said.
Average income as a whole fell again in the year ended March 2012 and were 7.2 percent below their peak in 2009-10, the London-based research group said in a report published today. Only the elderly were spared, with median incomes adjusted for inflation growing by as much as 3 percent between 2008 and 2012 for individuals older than 60, the IFS said. For people in their 20s, they dropped 12 percent, the largest decline of any age group.
Pensioners have long enjoyed faster income growth than working-age adults and pressure is building on political parties to target better-off retirees as they seek ways to narrow the budget deficit. The opposition Labour Party pledged this month to end winter-fuel subsidies for the richest pensioners if it wins the 2015 general election.
“These figures confirm that it is young people who have suffered most as a result of the recent recession and who are now at risk of falling further behind,” said David Phillips, a senior research economist at the IFS. “It is important that policy makers and politicians understand these profound changes to patterns of low incomes and respond accordingly.”
The IFS said the figures partly reflect the fact that employment rates for young people fell faster than other groups during the recession. State pensions increase in line with inflation, while many workers have had their wages cut or frozen.
“Whereas in the 1960s and early 1970s the poverty rate for pensioners was around six to eight times as high as for working-age adults without children, by 2011-12 the risks had near-enough equalized,” Phillips said. “Indeed, once housing costs are accounted for, pensioners actually had a substantially lower risk of poverty by 2011-12.”
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