Pensioners' investment income at 1977 levels However, the fall was more than offset by income from private pensions, which rose at an average of 5.5pc a year between 1977 and 2010 from £1,393 to £8,134, according to the Office for National Statistics. In 1977, over half of all pensioners were in the poorest fifth of households but are now "more evenly spread across the income distribution." More than half the improvement was due to higher income from private pension schemes, while income from the state pension and other cash benefits has risen from £5,012 in 1977 to £9,977. The tax burden on retired households has been roughly constant at 29pc of gross income, the ONS said, but the composition has changed. In 1977, pensioners paid 15pc income tax and 14pc in indirect taxes such as VAT. In 2010, it was 12pc income tax and 17pc in indirect taxes. The report also found that retired households are more insulated from recessions than working households. "Growth in the income of retired households has tended to fluctuate less than non-retired households, which has typically risen more rapidly during periods of economic growth and stagnated for longer during recessions," it said. This can be partly explained by the average household income from employment decreasing ... while average income from private pensions and the state pension continued to rise.