New research from the Resolution Foundation suggests that the typical pensioner is now as well off as the typical working-age family, once household size and housing costs are considered. This also applies to the poorest 10% of pensioners, who are reportedly better off than the poorest 10% of families.
The Foundation highlights that financial pressures are heaviest on young people and families, partly due to housing costs. The proportion of people in their thirties living in privately rented accommodation has risen from 10% at the turn of the Millennium to almost 30% currently. Over 20% of children are being raised in privately rented homes, which is described as the most expensive housing tenure.
In 2023-24, private renters spent an average of 35% of their net income on housing costs. In contrast, mortgagors spent 10 percentage points less of their net income on housing. The report notes that cuts to benefits over recent years and proposed future cuts will predominantly affect working-age families. Child benefit, for example, has been frozen in cash terms for seven of the fifteen years since the introduction of the pension triple lock.
The net impact of benefit changes from 2010-2024 was a real-terms cut of £1,400 for young people and families, while benefits for pensioners increased by £900 on top of inflation. The Resolution Foundation estimates that the triple lock will soon cost more than £15 billion a year, exceeding the cost of a straightforward link to earnings and the cost of increasing defence spending to 3% of GDP.