Think tank Resolution Foundation has conducted research showing that households headed by a 65-74 year-old hold about 19 per cent of the country’s wealth, compared with 16 per cent for the under-45s.
The reason for this is largely 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. As a result, the over-60s were the demographic least affected by the UK’s pay squeeze.
“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 and former MP. He added: “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. 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 the split in wealth did not mean that all pensioners were affluent, with one-in-seven having less than £50,000 to draw on throughout their retirement.
Link: Resolution Foundation