Elderly spend 40% of income on food, energy and council tax

Households headed by someone aged 75 or over spent nearly 40 per cent of their average weekly expenditure of £218 on food, domestic energy bills, housing and council tax in 2007, according to figures published today in ONS’s Pension Trends. Households headed by someone aged 65 to 74 spent over 30 per cent of the average (£321 per week) on food, domestic energy bills, housing and council tax. This was before the sharp increases in gas and electricity prices in 2008.

The proportion of total expenditure allocated to food, energy bills and council tax rises with age, because older people have to spend similar amounts on these items out of reduced incomes. By contrast, older person households spend a smaller proportion of the total on mortgage interest payments than middle aged households.

The analysis also reports on average incomes of pensioners. In 2006/07, pensioner couples received average income of £508 per week, compared with £267 per week for single men pensioners and £240 per week for single women pensioners.

The largest source of income for pensioners is state benefit income, which includes state pension income and benefits. Occupational pensions are also a significant source of income, and they were a key driver behind the increase in average pensioner income of nearly 40 per cent in real terms between 1994/95 and 2006/07.

Average incomes conceal considerable variations between poorer and richer pensioners. In 2006/07, the top 20 per cent of pensioner couples received 3.8 times the income of the bottom 20 percent, while for single pensioners the difference was 3.1 times, based on the median net income.