Simon Cook Simon Cook

Pensioners have never had it so good

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British pensioners are wealthier than ever. New figures from the Office for National Statistics, analysed by The Spectator’s data hub, show pensioner savings soaring whilst stagnating for those in work. 

When the coalition government brought in the triple lock in 2011, it had a noble purpose – to protect pensioners from falling behind. The state pension had failed to keep pace with earnings, leaving many struggling. The ratchet effect – linking pensions to inflation, wage growth or 2.5 per cent, whichever was higher – promised to solve this.

But almost 15 years later, has it delivered? And at what cost? Last week the ONS released its mammoth review of household wealth in Britain, with new data covering the pandemic years from 2020 to 2022. Tucked inside it are striking comparisons of financial wealth between pensioner and non-pensioner households. 

This is purely financial assets – bank accounts, ISAs, stocks – so essentially money that can be readily spent. It doesn’t include property, pensions or personalised number plates. Excluding property is important as rising house prices may make a household’s balance sheet look healthier, but it won’t pay the bills.

We analysed single-person households without children for a clear comparison, and the results are telling.

These figures don’t take inflation into account – but there’s an unmistakable trend. Since the inception of the triple lock, the median single pensioner’s financial wealth has doubled. Non-pensioners have – as you might expect – less money. If nothing else, they’ve had less time to save, and still have time to build up savings before retirement. But the widening gap suggests pensioners are in a much stronger position.

We see a similar story in the more affluent end of the spectrum:

Again pensioner financial wealth has doubled, whereas that of non-pensioners has barely shifted in 10 years. And that’s with inflation.

This is all well and good for the better off, but what about the less fortunate? At the lower end, the data is even more striking:

Here the difference is even more stark. Whereas the non-pensioners are bumping along in the red with more debt than savings, the pensioners have almost tripled their reserves.

True, these are small amounts and a £3,500 cushion is hardly lavish, but it’s a significant improvement from 15 years ago.

So has the triple lock achieved its aim? The evidence suggests that it has: pensioners are far more financially secure than they were when it was introduced. Now perhaps the policy needs to be more nuanced. Wealthier pensioners seem to have little need of it – despite getting the full benefit. Although the least well off have improved their situation, maybe they still need some help but a more targeted policy will be both cheaper and more effective. 

Ultimately, the triple lock was designed to protect pensioners from hardship, not bolster already ample savings. As the government looks to solve its financial problems, this may give them more evidence that the triple-lock has had its day.

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