Retired ‘wealthier than under-45s’

• 10 December 2015
• From the section Business

The recently retired have overtaken the under-45s to enjoy a larger share of the UK’s wealth, according to research by the Resolution Foundation.

The think-tank says a household headed by a 65-74 year-old holds around 19% of the country’s wealth, while the under 45s own just 16% of it.

That is despite there being many more under 45 households than over 65s.

This is attributed to the younger generation being hit by a pay squeeze and being less likely to own a home.

“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,” the report said.

“The over 60s were least affected by the UK’s pay squeeze,” it added.

The analysis was based on official figures from the Office for National Statistics.

“There has been a long-term shift in the share of household wealth across the UK, which has been accelerated by the recent financial crash and subsequent downturn,” said David Willetts, executive chair of the Resolution Foundation.

“To ensure that younger households enjoy the same wealth in older age as recently retired households, we need to see a relentless focus on productivity to get wages growing at a healthier rate,” he continued.

“There is also an urgent need for action to boost housing supply, and for government to take a far deeper look at the inter-generational implications of its public spending priorities.”

However, the report warned that this did not mean that all pensioners were well-off, with one-in-seven having less than £50,000 to draw on throughout their retirement.