Weekly pension income only increased by 1% per year in the past decade – more2life

Pensioners have only received a 1% increase (accounting for inflation) in average weekly pension income per year between 2013 and 2022, new analysis by more2life has revealed.

ONS data shows between 2013 and 2022, average weekly pension income grew by just £29, from £320 to £349.

Pension incomes peaked at an average of £376 in 2021, before falling £27 in 2022 – the first decrease recorded since 2017.

The average is expected to have fallen again last year, after another year of economic turbulence and rising living costs, creating financial challenges for elderly people on fixed retirement incomes.

However, average house prices jumped by 67% (not accounting for inflation) between 2013 and 2022, meaning many over 50s will own properties which have seen their value increase significantly.

Accessing this housing wealth could provide retirees with additional income or it could be used for discretionary spending.

Ben Waugh, managing director at more2life, said: “Our analysis shows that while pensioners have received very little in ways of income growth over the last decade, the value of their homes have accrued substantially.

“On the one hand, rising house prices can be an encumbrance for borrowers, with mortgage repayments often rising in tandem.

“However, it does mean homeowners will have a larger sum of equity tied up in their property, should they wish to unlock it – funds that can either be used to augment stagnant pension pots, help grapple with higher mortgage repayments, or even be put towards financing home improvements or a family holiday.”

Waugh continued: “The majority of UK homeowners have at least £70,165 worth of equity tied up in their property – a substantial sum of money.

“Equity release can serve as a vehicle to unlock these funds, with an increasingly diverse suite of later life lending products available on the market for over-50s.

“However, before coming to any conclusions, borrowers should seek the expert guidance of an independent financial adviser.

“It is important individuals are made aware of all the options that are open to them, and crucially, what option will produce the best outcomes for their personal needs – even if this means being advised against later life lending.”