Pensioner incomes have grown significantly faster than those of working-age households in recent years, according to the Resolution Foundation, while millennials are struggling to keep up with Generation X.
Typical working-age incomes may remain above typical pensioner household incomes before housing costs are factored in, but the think tank's report As Time Goes Byfound, once housing costs are taken into consideration, the median pensioner income is above its working-age equivalent.
The report identified the impact of a significant proportion of pensioners working beyond pension age as one explanation for the increase in income. Others included generous defined benefit pension schemes, an increase in public benefits and the rising value of investments - not least their homes.
The cumulative impact of pensioner incomes rising faster than those of working-age households in recent decades has led to a stark turnaround in pensioners' financial position relative to the rest of the population, argued the report. In 1961, pensioners made up 40% of those living in relative poverty. In 2017 however, this figure has fallen to 12%.
AJ Bell pensions expert Mike Morrison pointed out, however, the rise in pensioner income was "not across the board", explaining: "There are many pensioners for whom austerity and just managing are the reality of life.
"Those at the top have been lucky, with several key trends going their way. They are the last generation to benefit from generous final salary pension schemes, the generation that got the most out of the housing boom and the generation that did not leave higher education with debt."He added: "They are enjoying a moment in the sun - often literally - that future generations simply won't have unless they secure their own retirement income through individual pension planning."
The As Time Goes By report also noted that although years of economic growth and rising living standards through the last century meant it became the norm to expect each generation's income to be beat that of its predecessors, this did not hold true for millennials. It suggested that generation had not yet secured incomes that were any higher than those of Generation X at the same ages and could face future struggles.
'Review triple lock'
Old Mutual Wealth pensions expert Jon Greer argued the report gave the government further reason to pursue a policy agenda focused on rebalancing what he called the "intergenerational contract".
"The most obvious target is the triple lock, which was introduced to remove pensioner poverty and it has been successful in that endeavour," he added. "But now the relative decline in the State Pension has reversed, the triple-lock should be reviewed from 2020 and replaced with an earnings link.
"The government should also consider future policy on universal pensioner benefits. Targeting these benefits more efficiently to those that most need help could allow policymakers to help younger generations."
Close Brothers Asset Management head of pensions David Newman said the report's findings should act as a warning sign to younger generations.
The chairman isn’t answering his email
Reforms not enough
An economic cocktail
To encourage consumers to shop around
Will report to Pat Shea