Who's doing better: old or young?

Given that there is yet more comment today on how much better older people have been doing in financial terms -- supposedly -- than everyone else, it's worth having a a closer look at the figures.

The "elderly have done best in the austerity years" mantra is an important one, because it is likely to be used in the debate over whether all pensioners should carry on getting Winter Fuel Payment and free bus passes -- and, crucially, whether the Triple Lock should continue.

The Triple Lock is the guarantee that the state pension will be raised each year in line with average earnings, inflation or 2.5%, whichever is higher.

The latest ding-dong over this was prompted by official figures showing that while the typical incomes of working households have fallen sharply in real terms during the downturn, retired households have actually enjoyed an increase.

Here are the numbers: retired households up 5.1% between 2008 and 2012, working households down 6.4%. (Note, there's a fall because the income figures are adjusted for inflation or price increases.)

It's a big contrast. However, and weirdly, when this trend is highlighted, there is seldom any mention of how much money pensioners are actually getting -- or how little.

So let's look at some data in yesterday's Family Spending survey, which includes an analysis of the disposable incomes of different households and age groups. Disposable income is what you have after tax and National Insurance are taken off.

Non-retired households with two people received an average of £748 a week last year, retired households with private pensions and some work got £501 and those mainly dependent on the state pension had £295 a week.

The matching numbers for one person households were £336, £285 and £174.

If you look at household disposable income by age, it was nearly £700 a week on average where the homeowner or renter was between 30 and 64 years of age, but £478 for those between 65 and 74.

What's particularly interesting is that income falls with age through the years of retirement years. The figure for households with someone aged 75 and over is just £341 a week.

The reason for the decline is that the older people get, the less likely it is that someone in the house is carrying on with some form of paid work and the more dependent the household becomes on the state pension.

Of course, this is the reason why campaigners for the elderly point out that 1.5 million pensioners live in poverty. And they would say it is one reason for having the Triple Lock.

So the situation is:

*incomes of retired people have been rising faster

*but their incomes are lower to start with

NB Here are the household income tables. A37 and A38 are the relevant ones.

£2.69 on state pension

A £2.69 a week increase in the state pension is on the cards from April next year, taking it to £110.14.

The extra money will be little more than half the increase handed out to pensioners this year.

The Chancellor has promised that the pension would rise by the highest of CPI inflation, average earnings and 2.5% - the so-called triple lock.

The September inflation rate, reported tomorrow, is the figure used for pension and benefit uprating. It's expected to be 2.2% or lower, while average earnings have been rising at just 1.5%. So the 2.5% guarantee is likely to be called upon - resulting in the extra £2.69.

The Chancellor tends to confirm increases in pensions and benefits around the time of the Autumn Statement, which he'll deliver in early December.

By that time pensioners and others will be having to cope with the latest round of price increases from gas and electricity suppliers.

CPI inflation could well start rising again, so the £2.69 increase from the current £107.45 a week could look like a big disappointment.

Especially if you compare it to this year's £5.30 or 5.2% jump.

Fears about the state pension

"We can't rely on the state pension any more..."

While I was in Redcar recently, asking people for their opinions on saving for a private pension, I was struck that this thought came up again and again - on the street, in shops and elsewhere.

There's a genuine fear that the State Retirement Pension will be downgraded, allowed to wither or otherwise knocked about so it is not worth as much as in the "old days".

It's a worry expressed both by people who are saving and those who expect to rely on the state in retirement.

Where does it come from? I sense it is:

1. People banging on in the news about how to limit annual increases in state pension.

2. Publicity encouraging workers to celebrate being auto-enrolled into a workplace pension scheme. There are multiple warnings about how inadequate the state pension will be.

3. Attacks on other benefits and spending cuts, alongside dire predictions that the country won't be able to afford the bill for pensions in decades to come.

4. Suggestions that the Winter Fuel Payment and free TV licenses could be axed for some.

So despite the "triple lock" (a government guarantee that annual increases will be maintained at a higher level than other benefits) and the promise that we'll get a flat rate pension of £140 or more a week, large numbers of people simply don't trust the government over the state pension.

Clearly some question whether we'll have a universal state pension at all, looking far into the future.

Although that seems far-fetched, perhaps it's a measure of the growing gloom and pessimism about paying for ourselves during retirement and old age.