Older people's income catching up

17/01/2006 14:00

Households in the Netherlands which the main earner is aged 65 years or older have less income than households with a younger main earner. In 2004 the difference in income was 6 percent, after correction for the size and composition of the household. Older households have made up part of this relative deficit in recent years, though.

Less income than the under-65s

The disposable income of households with older breadwinners is lower than that of younger households. In 2004 households in which the main earner was 65 years or older had an average income of just over 23 thousand euro. This was nearly 23 percent less than the average income of households with a breadwinner aged under 65 years.

Disposable income by age of main earner

Disposable income by age of main earner

After correction for inflation, the income level of households with older income earners was nearly 4 percent higher in 2004 than in 2000. For households with a younger main breadwinner the increase was smaller, or there was even a decrease. Therefore households with older breadwinners have catching up to some extent.

Lower prosperity

There are relatively many single people and couples without children among households with older breadwinners. To make it possible to compare the households reliably, these differences in composition are corrected for. This results in a standardised income, which gives an indication of the material prosperity of these households. In 2004 the standardised income of households with a main earner of 65 years or older was 6 percent lower than that of households with a younger main earner. In 2000 the difference was still more than 8 percent.

Older single women have lowest income

Of the over-65s, older single women had the lowest income level; 13 to 14 percent lower than that of single men and couples without children. The income of single women younger than 65 was lower still. This is because this category is mainly made up of young women, who have only recently started work and do not yet have a family. Most single women aged over 65 are widows.

Standardised disposable income by age of main earner, 2004

Standardised disposable income by age of main earner, 2004

Older people spend a lot on their homes

A relatively large part of the income of older people is spent on their homes: in 2003 this accounted for 40 percent of their budget. For other households this was 32 percent. As older people have less to spend, the total amount they spent on their homes was some 1,500 euro less.

Spending by age of main earner, 2003

Spending by age of main earner, 2003

Over-65s spend relatively little on self-development, recreation and transport: one quarter of their income was spent on these categories. For other households this was more than one third. The difference is mainly in lower spending by older people on traffic and transport.

Henk-Jan Dirven