Official figures show shocking disparity in pensioner incomes

Our recent analysis of HMRC figures has highlighted shocking disparities in pension incomes throughout the UK.

Our recent analysis of HMRC figures has highlighted shocking disparities in pension incomes throughout the UK.

HMRC’s Personal Incomes Statistics 2015-16 show that while the top ten local authorities for pension income are all in London or the South East, the situation becomes more mixed further down the list with three of the bottom ten local authorities also being in London and the South East.

A North/South divide?

While the average income for London based pensioners is £18,400 per year this is bolstered by areas such as the City of London where mean pension incomes are £37,900, Westminster (£29,500) and Kensington and Chelsea (£26,700).

However, Barking and Dagenham came near the bottom of the list with a mean pension income of just £12,800. Only Stoke delivered a lower mean pension income in the UK with £12,300. Other South East boroughs near the bottom of the list were Southampton (£13,100) and Slough (£13,500).

The figures explode any idea of a North/South divide when it comes to pension income. The figures are based on the UK’s 31 million taxpayers, and include all forms of taxable pensions income.

This issue is not limited to England with Scotland and Wales also seeing large disparities. In Scotland average pension incomes range from £20,000 in Stirling to £13,900 in North Lanarkshire.  In Wales average pension incomes range from £18,700 in the Vale of Glamorgan down to £13,900 in Caerphilly.

Our view

Helen Morrissey, Personal Finance Specialist at Royal London said: “These figures show a shocking disparity in pension incomes with in some cases very prosperous pensioners living only a few miles down the road from those who are struggling.  The higher cost of living in areas such as London and the South East adds an extra burden to pensioners who are already under considerable pressure. ”

She added: “Such figures demonstrate the importance of planning for the long term by saving into a pension, and drives home the importance of financial advice for all. While auto enrolment has made a good start we can build on this by encouraging your clients to make higher contributions, and engaging employers and their workforce in the importance of saving for the future.”

Table 1. Top 10 local authorities for pension income 2015-16

  Local Authority Nation/region Pension income
1 City of London London 37900
2 Westminster London 29500
3 Kensington & Chelsea London 26700
4 South Bucks South East 26000
5 Elmbridge South East 25900
6 Mole Valley South East 25700
7 Camden London 24000
8 Chiltern South East 23300
9 Guildford South East 23100
10= Hart South East 22600
10= Waverley South East

22600

Table 2. Bottom 10 local authorities for pension income 2015-16

  Local Authority Nation/region Pension income (£ PA)
1 Stoke West Midlands 12300
2 Barking and Dagenham London 12800
3 Hull Yorks and Humber 12900
4 Sandwell West Midlands 13000
5 Southampton South East 13100
6 Bolsover East Midlands 13300
6= Leicester East Midlands 13300
8 Knowsley North West 13500
8= Slough South East 13500
10 Sunderland North East

13600

Source: HM Revenue and Customs, Personal Incomes Statistics 2015-16, March 2018

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