- Total wealth of those in their late 60s jumped by 46% in a decade, study shows
People in their late 60s have seen a disproportional increase in their wealth in the last decade while those in their late 30s have lagged behind, according to a new study.
The median total wealth of those aged 65 to 69 jumped by £112,567, or 46 per cent, between 2010-11 and 2019-20, research from the International Longevity Centre UK and M&G shows.
This has been driven by increases in property values and pensions, the report said.
In comparison, the average wealth increase for those in their late 30s was just nine per cent, or £6,751.
Those under the age of 40 now hold just four per cent of wealth, compared with the 7.5 per cent they held in 2010.
Widening gap: Total wealth by age bracket in 2010/11 compared with 2019/2020
Despite this, seven in 10 adults say they don’t receive financial help from their families, despite the increased wealth of older households.
Across all age groups, 47 per cent are concerned that they haven’t saved enough for retirement. For those between 25 and 49, this figure rises to 60 per cent.
The pension income required to lead a ‘moderate’ lifestyle in retirement has increased by 27 per cent in the past year alone, according to data from the Pension and Lifetime Saving Association.
David Sinclair, chief executive at the ILC, said: ‘We have managed to get ourselves into a complete pickle.
‘Wealth has become increasingly concentrated among older generations, while younger people are struggling to get ahead.
‘If we don’t act now, these inequalities will only worsen, leaving younger generations facing even greater challenges.’
The ILC and M&G say the ‘intergenerational contract’ – the principle of generations supporting one another at different points in their lives – is under threat due to this rising inequality.
On top of this, people are leading longer lives, which will see a quarter of people aged over 65 by 2040, compared to a fifth today.
Clive Bolton, M&G life insurance chief executive, said: ‘It matters because the contribution we make is a down payment on the future support we receive in old age, as well as providing the support we all need in the early stages of our life.
‘It’s a critical part of our daily lives – it supports our welfare system, health service, schools and the investment which powers the critical infrastructure that communities all use and rely on.’
The ILC and M&G are calling for an increase to auto-enrolment contributions to 12 per cent from the current eight per cent, as well as the creation of a ‘culture of saving’ and improvement to investment vehicles that pool investments across generations.
‘The upcoming Spending Review is an opportunity for the Government to work with financial institutions to redress the growing wealth gap between young and old,’ Sinclair added.
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