Another sign of Britain’s economic recovery was seen today as official statistics emerged showing the average household disposable income has finally surpassed its pre-crash peak.
But while the figures from the Office of National Statistics paint a generally positive picture, in the detail they reveal growing inequality across age groups. In fact, as the row over cuts to working tax credits deepens, data reveal that pensioners are enjoying record relative wealth while working age households lag behind previous highs.
Median disposable income, adjusted for inflation and the number of people in each household, stood at £25,600 for the 2014-15 financial year. The Daily Telegraph notes this is above a pre-downturn high of £25,400 – and 6.5 per cent above the post-crisis low.
But median income for working age households, including both those on benefits and those in work, stood at £28,100 – £800 below the pre-crisis high of £28,900. At the same time, income for retired households grew further above its pre-crash high of £19,300 to £21,100.
“While typical pensioner income is at a record high, living standards for the typical working age household remain below pre-crash levels,” said Adam Corlett of the Resolution Foundation. He added cuts to working age benefits, combined with the state pension ‘triple-lock’ that guarantees pensioners at least a 2.5 per cent income rise at a time of zero inflation, “risk reinforcing over this parliament.”
Earlier this month, the Institute for Fiscal Studies published figures showing “generous work pensions and better state support” has pushed pensioners’ income above that of their working age peers at £394 a week compared to £385.
Despite the recent shifts, The Guardian cites figures the show wealth in the UK has grown over the past four decades. Living standards have more than doubled since 1977, growing by just over 2 per cent a year on average. Since the crash income inequality has also fallen marginally, the report showed.