What we’re learning from the Wealth and Assets Survey

IMG_1378The Office of National Statistics has published wave 3 of their Wealth and Assets Survey

You can download it here

The report ignores the value of state benefits. Bearing in mind it would currently cost around £180,000 to buy a state pension equivalent on the open market, this survey shows just how pitifully poor second and third pillar pensions are in this country.

After 25 years promoting the financial capability agenda, we have finally admitted we need auto-enrolment to get us saving!

Here’s the ILC’s take!

The Wealth and Assets survey is the most comprehensive assessment of household wealth in Great Britain. The latest wave of the survey has just been released which gives us the opportunity to explore the state of the Nations’ wealth and how it has changed since previous waves.

Our analysis has revealed:

Median pension wealth is worryingly low but the story is complicated  

  • During the period 2010-12, median total pension wealth for all those who have saved something into a pension was £46,900.
  • According to the Legal and General annuity calculator, this could provide an annual income of £2,659 over the course of retirement[1]. In effect then, this would only provide enough income to top up that gained through the state pension.
  • If median pension wealth is calculated by including those who have no pension wealth it falls just £7,200! This is driven by the 42% of adults who have no private pension savings.

…pension wealth is higher for older groups but remains inadequate

  • Amongst the 55-64 age cohort, total median pension wealth is £135,900 after excluding all individuals who have saved nothing.
  • Using the same annuity calculator that could deliver an annual income of £7,638 – a significant improvement on the overall median, though still woefully short of what is needed to secure an adequate income in retirement.
  • And even amongst this older age cohort, 28% of individuals have no pension savings whatsoever which is very worrying.

…Gender divides remain stark

  • 37% of women amongst the 55-64 age group have no private pension wealth compared to 19% of men.
  • Median pension wealth for those who have some pension savings, is far lower for women of this age group at just £99,100 compared with £173,100 for men.

…don’t forget younger age cohorts

  • The younger age groups (16-44) were the only age groups to experience a fall in total pension wealth since the last wave of the survey.

Property wealth remains king for many households

  • Property wealth remains the largest component of total household wealth across deciles and the most evenly distributed.

…but property accounts for a lower proportion of total wealth that it did

  • Despite property accounting for such a high proportion of peoples’ total wealth, it has declined since the first wave in 2006/08, while pension wealth has increased.

Savings account…get me out of here

  • The proportion of people with a savings account has fallen from 68% to 58% since the last wave.

Beware of regional differences

  • Total wealth in London has risen by over 30% since the 2006/08 wave by comparison to a fall of 10% in the North East.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in annuity, pension playpen, pensions and tagged , , , , , , , . Bookmark the permalink.

Leave a Reply