Incomes of older people are on average lower than those of the population, even when differences in household size are taken into account. The incomes of the over 65s had incomes of 87% of the total population’s in 2012-13. The incomes of the people aged between 66 and 75 equalled 92% of the total population’s while the over 75s had income equal to 80% of the total population’s. In most OECD countries, public transfers provide the bulk of income in old age.

On average in the OECD, 12.6% of individuals aged over 65 live in relative income poverty, defined as an income below half the national median equivalised household income. There is large variation between countries. Poverty rates are higher for older people than for the population as a whole, which averages 11.4%. However, this result is driven by a handful of countries. In 18 out of 34 OECD countries, old-age income poverty is lower than for the population as a whole.

Average worker earnings (AW) is an important metric as all pension modelling results are presented as multiples of this measure. The average worker earnings for all OECD countries averaged USD 40 007 in 2014.