Retired households in the UK have seen their annual income grow by 13% since the financial crisis while the rest of the UK has experienced a decline.
The Office for National Statistics (ONS) has released its latest report on disposable income and inequality. The report states that although the UK’s average household disaposable income (after tax is paid) has increased since the crash, this has been solely down to a rise in retirees’ income.
Between 2007/08 and 2015/16, income for retired households grew by 13% to £21,800. But the rest of the country suffered a 1.2% drop, taking average yearly household disposable income to £28,500.
In the last year alone, retired households saw a 3.1% increase while non-retired household income was flat.
When it comes to tax, households paid an average of £7,800 in direct taxes over the last financial year - equivalent to 18.7% of their pre-tax income. The richest fifth typically paid £20,100 in direct taxes, the vast majority of which was income tax. The lowest fifth paid £1,600 last year with most cash being spent on council tax.
Claudia Wells, head of household income and expenditure analysis at the ONS, says: “Household incomes are above their pre-downturn peak overall, but not everyone is better off. While retired households’ incomes have soared in recent years, non-retired households still have less money, on average, than before the crash.”