The above title is the sound bite currently making its way around the media. While it may not be ‘fake news’, it is a gross over-simplification as it compares the averages of two heterogeneous age cohorts.
Behind the numbers
The baby boomers who have recently retired have benefited from generous defined benefit pensions, the large rise in house prices, the absence of university fees, and the increase in the stock market during their lifetimes. These young pensioners may also still be working, which further increases their incomes.
On the other hand, older pensioners will have received less benefit from these effects, leading to much lower incomes. The considerable inequality between age cohorts of pensioners is masked by the use of overall averages. There is also the inequality between pensioners within the same cohort, e.g. those who retired from well paid jobs with a good private pension, and those who received a much lower income and have no private pension.
The problem is not rich pensioners, but a young generation that is relatively poor, due to the effects of austerity and the absence of affordable housing.
‘Generation rent’ will get less benefit from rising house prices, must pay university fees, and are only offered defined contribution pensions by private sector employers. However, some members of ‘generation rent’ will be supported in various ways by their older (richer) relatives, leading to a more equitable outcome than the statistics indicate.