22 January 2016, 00:00
Over 50s contribute more than 6 trillion to the UK economy
• Pension and property wealth up by £660bn since 2011
• As MPs study ‘inter-generational fairness’, Saga Investment Services says that ‘the savings culture of the over 50s is vital to the UK economy and in stimulating growth’
Britain’s over 50s population now holds 69.7% of all household wealth in the UK, equivalent to £6.2 trillion, according to a new report from Saga Investment Services, making the older generation’s money management critical to the economy as a whole.
The ‘Savings and the Over 50s’ report, carried out in conjunction with the Centre for Economic and Business Research (CEBR), shows the share of financial, pension, property and physical wealth owned by the over 50s population has increased consistently over the past five years, with this age group now controlling more than half of all the assets held by UK households.
These findings come as The Commons Work and Pensions Committee begins its investigation into ‘inter-generational fairness’, in which it will review whether pensioners are being favoured by the pension and welfare system at the expense of younger workers, due to the political impact of the ‘grey vote’. Saga Investment Services argues that many of the UK’s over 50s have worked and saved to accumulate this wealth, and should be encouraged to continue to do so – both for their own financial security and for the good of the economy as a whole.
Commenting on the figures, Nici Audhlam-Gardiner, managing director of Saga Investment Services, said: “The prosperity of the UK’s over 50s is not a sleight of hand but rather testament to their own efforts. Many people have worked hard, saved diligently and built up savings, investments and pensions over many years of working. As they approach and then move into retirement this money needs to work hard for them in order to allow them to achieve their goals and maintain their quality of life.
“It is also worth remembering that many over 50s are not just saving for themselves. A number of this age group will want to do as much as they can for younger family members, whether children or grandchildren – using their savings to help them get on the housing ladder or pay for expenses such as school fees.”
Pension and property wealth have increased the most since 2011 – five years ago, the over 50s held £1.97 trillion of property wealth; by the second quarter of 2015, this had soared by 27% to £2.29 trillion. The share of overall property wealth held by the over 50s has also increased, from 68.6% to 69.3%.1
Meanwhile, pension wealth has risen by 15%, from just under £2.2 trillion in 2011 to £2.52 trillion in the second quarter of 2015. This highlights how important it is for over 50s to understand how to manage their money and look at generating the best outcomes.
The report also uncovered that:
• Over 50s now hold more than £3 in every £4 (76.2%) of financial wealth (stocks, bonds and other investments), worth just shy of £800bn
• Yet the typical over 50s household holds less than a fifth of their money in financial assets, creating a potential income gap by missing out on better returns
• Physical wealth ownership – such as vehicles, art and furniture – has increased by £100bn, to just over £600bn
The average financial wealth - the amount held in bank accounts, savings and investments - of over 50s households currently stands at £69,148. The wealthiest group of over 50s, on average, are those in their 60s, with an average household wealth of £83,105.
Nici Audhlam-Gardiner said: “These findings illustrate just how important the savings culture of the over 50s is to the UK economy. Decisions made by this demographic - how they save, invest and spend their money makes a huge difference not just for their own well-being but for the whole economy.
“The benefit of supporting the over 50s demographic to make more informed investment decisions is not limited to those households directly affected by any boost in returns. The wider impact of increased investment earnings is considerable, from increased household consumption through to higher government tax revenues and less reliance on state-funded care in later life. As such, it is in everyone’s interest to encourage and support the nation to be better informed and more comfortable about managing their money.”
Notes to editors
1 Sourced from Saga’s ‘Savings and the Over 50s’ report.
About Saga Investment Services
Saga Investment Services has been developed to open up the world of investing and financial planning to the UK’s over 50s in the run up to and throughout retirement, and to make the process as simple and stress-free as possible. Customers can invest from just £100, and have access to investment advice and financial planning services. Saga Investment Services champions a straight forward and transparent approach to investing, and is a proud member of the Plain English Campaign. It is a joint venture between Saga, the leading provider of services to the nation’s over 50s, and Tilney Bestinvest, the expert investment and financial planning group.
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