Private over government pensions, new survey suggests
Those with a pension would increase their incomes if they moved from a state to a private retirement scheme, a new study suggests.
The Lloyds TSB Wealth Management Pensioner Incomes report looked at data from the Department of Work and Pensions and the Office for National Statistics collected between 1987 and now.
It found that growth in the stakeholder pensions sector has seen a 131 per cent increase over that period, more than three times the rate at which state-funded schemes have done so (43 per cent).
In 1987, over-65s could receive £97 a week on a private retirement scheme, compared to £224 today, while those on a government pension saw £115 per week 22 years ago, while this is £165 now.
More elderly people are also taking advantage of the alternative, with 60 per cent of all income for those at retirement age coming from stakeholder pensions, compared to 46 per cent on 1987.
Nitesh Patel, economist at Lloyds TSB Wealth Management said: "There has been a significant increase in the average pensioner household's income over the past 20 years. Much of this rise has been driven by the growing importance of privately sourced income to provide for retirement."
A recent report by LV= showed that over-50s are expecting to have to continue work past the age of retirement because the recession has affected their ability to save for their pensions.
There has been an increase in the number of ERICs (those Experiencing Retirement Income Concerns) in the past 12 months, with 20 per cent of over-50s having reduced the amount being put towards their pension by an average of £137 a month, according to the report.
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