Older households’ economic position is mixed across rich countries: The Economist reports pensioners lost ground to people of working age in 26 of 32 countries, while official data document gains over longer periods.
United Kingdom figures show earlier gains in pensioners’ incomes and place in the national distribution. Average weekly income after housing costs rose from £195 in the financial year ending 1995 to £387 in the financial year ending 2023, measured in financial year ending 2023 prices, according to the Department for Work and Pensions (DWP). The share of pensioners in the top half of the income distribution after housing costs increased from 38% to 49% over that period. Their share in the top fifth went from 13% to 17%.
The Organisation for Economic Co-operation and Development (OECD) found that people older than 65 had average disposable incomes equal to 87% of the population average in 2022. In a separate measure spanning three decades, more than two-thirds of OECD members with available data recorded greater income growth for people ages 55 to 64 than for those ages 25 to 34. That comparison covers older workers and a longer period than The Economist’s pensioner finding.
A Federal Reserve Bank of St. Louis study compared average household wealth across generations at similar ages. Households headed by people born in 1981 or later averaged $347,000 when their cohort’s average age was about 34 in the fourth quarter of 2024. Baby boomer households averaged $257,000 at a similar age in the third quarter of 1989. Both amounts are in 2024 dollars; they do not compare the generations’ total wealth today.
In the euro area, European Central Bank (ECB) researchers estimated that inflation in 2021-22 caused welfare losses equal to about 4% of disposable income for the median household. Retirees saw the largest losses, which researchers linked partly to their greater holdings of nominal assets, such as cash and deposits, whose real value fell as prices rose. For middle-income retirees, the net nominal asset channel alone represented losses equal to 11% of income across the two years. The researchers found that fiscal measures offset some losses, with retirees receiving the largest benefit.
The OECD projects that pension and health spending will rise by an average of 0.09 percentage points of GDP each year through 2060, for a cumulative increase of 3 percentage points. It says financing will rely increasingly on taxes and contributions from a shrinking working-age population.
