A Saga report shows that the nation’s over 50s hold a larger proportion of the UK’s assets than they did at the start of the financial crisis. Also during 2015, thanks to the new pension freedoms, an extra £1.5 billion will be released for people to invest, spend or give away as they see fit.
Lance Batchelor, Saga’s chief executive said:
“It should come as no surprise that many people who have worked, saved and invested over a number of years have built significant wealth. Saving and investing for the future benefits individuals, families and, through the increased spending power of older consumers, the wider economy.
“Greater pension’s freedom is something that Saga has lobbied long and hard for on behalf of over 50s, so we were delighted when the Prime Minister first spoke about the proposed changes at a Saga event in March. It is great that Government has recognised that people, who have saved hard, can be trusted to make decisions about how they make the most of their retirement savings. It is estimated that the new pension freedoms that come into effect in April 2015 will mean that an additional £1.5 billion of pension savings will be unlocked in that year alone.
“It will be important for people to make the best use of these pension freedoms. Getting the right unbiased advice or guidance about how much to spend, and how to invest for future needs, will be crucial for both the wealth and happiness of the over 50s”
The Saga study, commissioned from the independent Centre for Economic and Business Research (CEBR), found that the over 50s hold 68.3% of all UK household wealth (£7.8 trillion), 77.3% of all financial wealth (£1.2 trillion) and 66.2% of all property wealth (£2.5 trillion). This is a modest increase from Q3 2008 when the figures were 67.6%, 74.4% and 65.3% respectively. While this has been partly driven by increasing numbers of over 50s and rising property values, Saga’s research found that depressed bond yields and annuity returns have meant returns on savings have actually declined. Pensions wealth, meanwhile, also increased slightly since 2008 – from 70.3% to 70.8% (£3.4 trillion), but again, the new flexibility to access pensions savings is expected to soften this trend.
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