Increased Pensioner Spending Power Lifts UK Living Standards

With household incomes now back at its 2007-2008 level, pensioners are enjoying much of their retirement within this year. With the rising incomes of the nation’s retirees, the huge losses in 2008 had finally been recovered today.

The Office of National Statistics said working households can still improve to cement its return to pre-recession levels.

The ONS estimates that the median disposable income now stands at £25,600 in 2014 to 2015.

Those In Work Still Not Reaping Full Benefits

However, those who are still employed could not feel the benefits of the household income increase. Employment wages, while higher than 2014-2015, are still insufficient to reach its levels during 2007-2008.

Non-retired households had income increases in 2014-15. However, they are still £800 below their pre-recession numbers of £28,900 and £28,100.

According to ONS Director General for Economic Statistics Jonathan Athow:

“Today’s release shows how ONS is exploiting existing data sources to provide key information on the economy and living standards much more quickly than before.

“The data show that, overall, household incomes have now returned to pre-downturn levels. However, the incomes of non-retired households have yet to regain their previous peak.”

Analysts Believe FCA Efforts Lacklustre in Urging Pensions Shopping

Analysts call on the FCA to boost their efforts to get pensioners shopping for more annuities than sticking with what they have or going for a pensions withdrawal where they could lose half of their hard-earned pensions.

The organization recently published proposals to deal with the outcome of April’s pension freedom changes. The paper also covers the regulation on design and distribution of products, their projections and improving the organization’s communications with customers.

Annuities Comparison

Only about 45 per cent of people are shopping around for annuities while about 55 per cent are withdrawing all their pensions. The latter is not the best deal while being the most appealing for many retirees.

Uninformed decisions led to pensioners losing half or almost all their pensions.

Pension providers have locked some accounts from pension freedoms until the pensioner gets advice from a financial adviser. The latter’s expensive service fees leave pensioners at a loss to either blindly withdraw their pension or stick with their current annuities.

Other Efforts

The FCA intends to use the UFPLS for income drawdown to allow pensioners to achieve the same outcomes. Analysts believe this to be a sensible step.

The FCA also urges firms not to ask the pensioners questions that will help identify potential risks for funds below £10,000 and without safeguarded benefits.

Despite well-meaning efforts, the FCA still has a lot to go through until they resolve the issue once and for all.

State Pension Top-Up Scheme: Yay Or Nay?

By today, pensioners can boost their state pension income up to £1300 yearly as the government rolls out the new state pension top-up scheme.

It sounds exciting according to some pension observers. It sounds troublesome and meddlesome, according to the other side.

And here I am trying to figure it out for my readers.


  • Pensioners who reach their state pension age before April 6, 2016 can buy an additional guaranteed income rather than earning a lump-sum.
  • They can increase their state pension up to £25 weekly.
  • They can do this for 18 months.
  • Efficient for self-employed individuals willing to build their state pension payments.
  • Index-linked extra payments that adjust for inflation (wow)
  • Inheritable extra payments for surviving spouses and civil partners (double wow) once they reach their state pension age.
  • However, the state pension top-up is taxable is income.



Like almost every new state pension and pension law reforms the government introduces, they come as a double-edged sword.

For example, if a 65-year-old retiree shells out an extra £10 from his pension would be higher compared to a 75-year-old who makes the same contribution rate. This is due to the life expectancy clause. This is completely different from annuities, mind you.

But it does have good grades for having index-linked payments that adjust for inflation based on their years-before value. Of course, this depends if the UK’s economy is doing well.

Having an inheritable state pension top-up for surviving spouses and even civil partners is a great plus.State Pension Top-Up Scheme: Yay Or Nay?