Why is it shocking that older people at the end of their careers are better off than those just starting out? Younger people should aspire to being well-off in later life, that’s a success

by Dr. Ros Altmann

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In response to the report from The Institute for Fiscal Studies which found that pensioner incomes have risen by slightly more than those of non-pensioners in the past 12 years, Dr Ros Altmann, Director General, Saga said:

“Surely we want younger workers to aspire to have good incomes and assets for their longer retirements by working and saving hard. It seems surprising that people are taken aback that younger people are less well off than those who have finished a whole working life, have reached the top of their career and saved hard for their future.

“This debate is wrong headed. We should use this evidence to encourage young people to aspire to be better off by working and saving like the current generation of pensioners have done.

“This report also reflects increases over the long term since 1999. Since the start of the financial crisis in 2009 pensioners have seen a number of factors dramatically damaging their income – from ultra low interest rates damaging their savings, cuts in Winter fuel payments and the effects of Quantitative Easing on annuity and income drawdown values. Inflation has also been negatively impacting the spending power of this group.

“At the same time, it is important to remember that not all pensioners are well off and that those poorer pensioners are very much reliant on society to look after them.

“With an ageing population, we should be celebrating the success of seeing those now reaching retirement having built up income and assets at the end of their working lives. And we need younger people to aim to do the same. They still have years of work to give them chances to be better off in later life. To suggest that it is somehow wrong that older generations are better off than the young is to defy the aims of policies that have been in place for decades. We, as a society, have encouraged self reliance and saving for the future. To then point to those who have stuck to these aims and suggest they should be penalised for it by transferring money from them to the young will send a message to younger people that they should not bother to save or better themselves because society will punish them for it later.”