At least 1.4 million pensioners are still working in retirement, according to the latest Pensioners’ Income Series figures from the Department for Work and Pensions.

The total of all pensioner units (comprising single pensioners and couples) receiving income from earnings for 2007-08 was 17 per cent compared to 12 per cent in 1997-98.

The figures also reveal that pensioner couples are more inclined to rely on earned income, with 29 per cent being in receipt of income from earnings, up from 22 per cent for 1997-98.

Gross pensioner income (from all sources for pensioner units aged 65 or over) for 2007-08 was £366 per week compared to £277 for 1997-98, an increase of 32 per cent.

The increase in income from earnings for the same period was 71 per cent from an average of £21 per week for 1997-98 to £36 per week for 2007-08. Income from earnings now accounts for 10 per cent of average gross pensioner income compared to eight per cent for 1997-98.

Income from state benefits (including state pension) increased over the period by 22 per cent, however income from benefits still remains the highest contributor to pensioner income, providing 48 per cent of pensioner income.

Dean Mirfin, Key Retirement Solutions group director, says, ‘The worrying trend that these new figures show will not come as a surprise to anyone. With falling retirement provision ahead, we expect that the percentage of income coming from the state will fall further behind the cost of living.

He adds, ‘Of further worry is the widening gap between pensioners net and gross income, showing that taxation of our older population is rising. The net increase in income has fallen five per cent below the RPI over the period, a strain which many pensioners increasingly will struggle to bear.’