Pensioners’ incomes have increased steadily since the 2008 financial crisis, while working households have struggled to recover, ONS research released today has shown.
Working households are still worse off than before the crash, with average household income in 2015/16 still 1.2% lower than in 2007. However, the income for retired households has increased steadily by 13% over the same period.
The figures demonstrate the average household income in the UK has increased to £26,300, up £600 from the previous year.
“Household incomes are above their pre-downturn peak overall, but not everyone is better off”, said Claudia Wells, head of household income and expenditure analysis at the ONS.
“While retired households’ incomes have soared in recent years, non-retired households still have less money, on average, than before the crash.”
Overall, income inequality is falling. The ONS said there has been a “gradual decline” in inequality between the richest and poorest households over the last ten years, with levels of inequality similar to those in the mid to late 1980s.
The ONS’ findings appear to confirm research from the Institute of Fiscal studies on wage stagnation. In November, The IFS found that real wages in the UK have still not have recovered to their pre-2008 levels, and forecast that this trend would continue as Brexit takes its toll on the economy.
The think tank's director, Paul Johnson, said in his post-autumn statement briefing,
“One cannot stress enough how dreadful that is – more than a decade without real earnings growth. We have certainly not seen a period remotely like it in the last 70 years.”
