Overview

• Retired households’ median disposable income fell to £29,728 in 2023/24, £558 lower than in 2020/21, while median gross income was £32,328 versus £33,337 in 2020/21.
• The state pension rose 4.1% in April 2025 under the triple lock, and wage data point to around a 4.7% increase from April 2026, lifting the full new rate to about £241 a week (£12,535 a year).
• With the personal allowance frozen at £12,570, a £12,535 state pension would leave roughly £35 before hitting income tax, pulling more pensioners into paying tax.
• Experts say cost-of-living pressures and the shift toward less generous defined-contribution pensions are eroding retirees’ financial resilience despite headline upratings.
• Joseph Rowntree Foundation analysis projects further falls in typical household disposable incomes by the end of this parliament, with the lowest-income third losing about £1,110 a year by 2029.