Despite fears of pensions under-funding, the Department for Work and Pensions (DWP) shows the average income for pensioners has grown 29% between 1997 and 2007 but the DWP reports older people are living longer, healthier lives than they were 10 years ago, but warns more action needs to be taken to deal with an increasingly older population when they reach retirement.

Minister of state for pensions Rosie Winterton, said: "Young people should start to think about what kind of life they want to lead when they are older and what they can do now to prepare for it."

In a new strategy, the Government is planning to devise volunteering and further education schemes for older people following their retirement to improve their wellbeing.