THE retirement income gap between households with a private pension income and those without is growing, according to figures.

By 2016, retired households receiving a private pension had disposable incomes around 1.6 times higher than households that were not.

Between 1977 and the financial year ending 2016, the disposable income of retired households rose at an average annual rate of 2.8 per cent after accounting for inflation and changes to household composition, the Office of National Statistics said.

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This compares with average annual growth in non-retired households of 2.1 per cent.

The average disposable income of households with private pension income has grown from £2,300 in 1977 to £27,800 in 2016.

Meanwhile, the average income of households without private pension income has increased from £1,700 to £17,200 over the same period.

In the financial year ending 2016, those with a private pension had average original incomes which were around 14 times higher than those who did not receive any private pension income – at £19,000 compared with £1,300 respectively.

Original income is money which does not come from government intervention and includes cash from jobs and investments.

The ONS said 40 years ago, in 1977, just more than one-fifth (21 per cent) of retired households had an annual disposable income of more than £10,000, after accounting for inflation and household composition. But by 2016, this had surged to 96 per cent of retired households.

Workplace pensions, personal pensions and annuities were classed as private pensions for the findings, while the state pension was put in the category of a cash benefit.

The ONS said although since 2011 the average value of cash benefits for retired households has generally been increasing, “those without any form of private pension income are not having their incomes supplemented enough”.