The generation who are turning 70 this year are better off as a whole than the rest of population has been for their entire adult lives, according to new research.
This age group, born around the time of the Queen’s coronation (making them the platinum jubilee generation) happen to have enjoyed many financial benefits throughout their lives which mean they’re better off.
Why is this age group wealthier?
The Institute for Fiscal Studies (IFS) released new data on Monday explaining: “This generation benefited from the strong growth in earnings in the 1980s and 1990s in particular, and from the increasing generosity of the state pension in more recent years.”
This group also has an average household income of £26,400 per year now they are not working. This is higher than the population as a whole and even higher than the incomes they received during most of their working lives.
IFS explained that, even when this group were around 25 years old, their average incomes were £12.500 (in modern currency) – while the rest of the UK had £10,700.
Again, during the Golden Jubilee in 2005, they had average incomes of £26,800 – £5,700 higher than the UK average at the time.
This group were also able to benefit from the country’s property price boom with 85% of them being homeowners and 14% still owning a second home today.
Back in 1952, the average property price was the equivalent of £40,000 in today’s money. Now, it has shot up to £260,000.
IFS director Paul Johnson described it as “extraordinary and unprecedented” data and said: “I still struggle to get my head round these statistics.”
But, that’s not the whole picture
Despite these findings, UK pensioners have been among the hardest hit by the rising cost of living.
In April, the state pension rose by 3.1%. Age UK conducted a survey in January noting that 54% of responding pensioners said the increase in prices means they will have to heat their homes less.
Just under a quarter said they will have to choose between heating their homes and the food they buy if their bills went up, while 43% overall said they would have to either cut back, go into debt or just not pay their bill.
IFS also noted that before the pandemic, around 18% of the same generation were in relative income poverty.
But, for comparison back in the Silver Jubilee year (1977) those over state pension age were more than twice as likely to be poor as those under state pension age, suggesting once again life improved for the Platinum Jubilee generation.
What about the government’s new cash boost?
Last week, chancellor Rishi Sunak announced a heft £15 billion package to help with skyrocketing energy bills.
This was broken down into a £400 universal payment for all UK households, one-off payments to means-testing benefit recipients worth £650, and £150 extra for disabled people. There was also an extra £300 for pensioner households.
Resolution Foundation’s chief economist, Mike Brewer, said: “The biggest winners from yesterday’s package are wealthy pensioners, who may not need extra support but still stand to gain £850, while large families on low incomes may feel rough justice as their higher energy usage isn’t reflected in flat-rate lump-sum payments.”