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Newly-retired 'wealthier than under-45s'

Older couple smiling Image copyright Thinkstock

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 households headed by a 65-74 year-old hold about 19% of the country's wealth, compared with 16% for the under-45s.

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, and former Conservative MP.

He said: "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."

Mr Willets told the BBC that if the widening gap was not addressed it could prompt "real problems with social mobility", as younger people without property-owning parents ended up without a stake in society.

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

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