The current generation of U.K. pensioners is better off than ever before, according to new research by an influential think tank, and for the first time those that are retired have incomes higher on average than the rest of the population.
According to the U.K.'s Institute of Fiscal Studies, current retirees are enjoying incomes that are better than most, once housing costs and family composition are taken into account, and that research suggests "pensioners' incomes will continue to rise for at least the next decade."
There has been an "astonishing turnaround" in poverty among elderly people, the report authored by IFS Director Paul Johnson noted.
Not only has life expectancy risen unexpectedly, but incomes in retirement have "been rising fast and much more than for the working age population" reflecting rising state and private pensions, rising house prices and more generous means-tested benefits, Johnson said.
Pensioners' incomes have continued to rise after the U.K.'s recession in 2008-2009 (and even before then) as the incomes of working-age households have fallen too.
"Just 30 years ago, pensioners were at least three times as likely to be poor as non-pensioners. They are now less likely to be poor," Johnson said in the report.
However, it is unlikely that later generations will do as well with Johnson warning that "further ahead things may look less rosy."
"Future state pensions will be less generous on average, there has been an extraordinary fall in rates of home ownership, and, in the private sector, a collapse in membership of defined benefit occupational pension schemes."
"Younger generations are also likely bearing some of the cost of these generous occupational pension schemes from which they themselves will never benefit," the report stated.
Remaining policy issues facing the U.K. government were the state pension age (currently at 65 with pensioners receiving a weekly pension of £115.95 ($178.85) and the government's "triple lock" scheme which pledged that state pension payments would rise in line with whichever is the highest of earnings, inflation or 2.5 percent.
Reporting the IFS' research at a conference Tuesday evening, Johnson said the cost of the policy, compared with only uprating pensions in line with the earnings of the wider workforce, would within five decades reach "well over £20 billion a year" in today's terms.
U.K. Prime Minister David Cameron has pledged to scrap the policy but the research could prove controversial at a time when the government is planning on scrapping "tax credits" -- benefits for working-age families.