Pensioners are facing a brutal squeeze on their finances as their disposable incomes tumble to the lowest level in a decade, official figures have revealed.

The average retiree now has just £569 a week – or £29,588 a year – in real terms post-tax income, down from a peak of £599 a week in 2020-21.

That year marked the start of a quiet but deeply damaging tax raid by the Government, as ministers froze income tax thresholds in a move that has steadily dragged more older people into the tax net.

The figures, from the Department for Work and Pensions (DWP), lay bare the growing financial strain on millions of retirees.

Pensioner incomes have been gradually eroded by a toxic combination of rising living costs and frozen tax bands imposed by successive Tory and Labour governments, with some 700,000 more pensioners expected to face an income tax bill for the first time next year.

Experts say the stealth tax is forcing many older people to tighten their belts just to stay afloat. What’s more, Chancellor Rachel Reeves has confirmed the threshold freeze will remain in place until at least 2027-28 – a move likely to deepen the squeeze.

In cash terms, pensioners’ pre-tax incomes have crept up modestly over the past decade – from £656 a week in 2013-14 to £688 last year. But that modest growth has been outpaced by inflation, and more importantly, eaten away by tax.

Separate analysis suggests wealthier retirees now need an extra £2,729 a year just to maintain the same standard of living they enjoyed four years ago. Much of this shortfall is down to tax, as the rising state pension edges closer to breaching the personal allowance threshold – meaning pensioners are now taxed on money the state gives them to survive.

Tom Selby, of investment firm AJ Bell, warned: “Frozen income tax thresholds are working in direct opposition to the triple lock. You get a bigger pension with one hand, then the taxman takes it back with the other.”

He added: “Those lucky enough to have gold-plated final salary pensions with inflation protection will see bigger slices of their income taken by the taxman each year.”

Experts also warn that we may be witnessing the twilight of the so-called ‘golden generation’. Many of today’s pensioners benefited from generous defined benefit schemes, final salary pensions, and full home ownership – a combination that provided real financial security in retirement.

But that’s fast disappearing. Younger generations, saddled with high housing costs and patchier workplace pensions, face a bleaker future.

Jon Greer, head of retirement policy at Quilter, told the Telegraph the figures should be seen as a “wake-up call”.

“After a decade of relative stability, pensioners’ spending power is being eroded. The combination of rising prices, frozen thresholds, and limited income flexibility is a perfect storm. And with higher energy bills and care costs, it’s harder than ever to maintain a decent quality of life.”

The triple lock has become a political football in recent years. Designed to ensure the state pension keeps pace with inflation or wage growth, whichever is higher, it has led to bumper increases – with another £1,900 rise due this Parliament.

But ironically, the same measure is now pushing more retirees into paying tax on their pension income. The new full state pension is projected to breach the £12,570 personal allowance by 2028, meaning even those relying solely on the state pension could find themselves paying income tax.

Adding to the pressure, Labour last year announced changes to the winter fuel allowance. The benefit, worth up to £300, is now means-tested and available only to those on pension credit – stripping support from millions of middle-income retirees.

The Treasury insists it is helping older people. A spokesman said: “We are committed to helping our pensioners live their lives with dignity and respect. That’s why we have frozen fuel duty and increased the state pension, leaving pensioner couples up to £88 better off a month.”