Recently retired individuals 'enjoying greater wealth than the under-45s'
10 Dec 2015
Newly-retired people in the UK are enjoying greater wealth than the under-45s, new research has suggested.
Official figures from the Office for National Statistics (ONS) provided a basis for the study conducted by the Resolution Foundation.
Households headed by 65 to 74-year-olds own around 19% of the UK’s wealth, whilst those aged under 45 own only 16%.
This revelation comes despite the fact that there are many more households headed by under-45s than over-65s.
According to the report, this is due to the ongoing pay squeeze affecting younger members of society. This generation is also less likely to own their own homes, while people aged 60 and over were ‘the least to be affected’ by the UK’s pay compression.
The study found that in 2012, households in the 16-44 age group had average wealth of £179,000, whilst those in the 65-74 age group had wealth of £540,000.
The report stated: ‘The stark generational wealth divide has grown since the financial crash, as a result of the recently retired being relatively protected in a downturn where house prices had a swift recovery, while real wages took six years to start increasing again’.
However, the report has issued a warning stating that despite the shift in the distribution of wealth, one in seven pensioners currently has less than £50,000 to fund their retirement.