This is good stuff from the Resolution Foundation .

The baby boomers really are doing for Gen x/y

David Willets is an interesting chap. Once known as “two brains” he may have jettisoned one – now he’s gone to the Lords, but he’s still clever and I wish I could be at Keele University to see him talk.

Apparently – if you want them – the slides he’s talking to are available from




“The share of wealth enjoyed by the recently retired has overtaken that held by under 45s since the financial crisis, David Willetts will say at a lecture at Keele University later today (Thursday 9th December).

Willetts will draw on new analysis by the Resolution Foundation which shows that the share of total wealth held households headed by someone aged under 45 fell from 20 per cent in the years approaching the recession to 16 per cent in 2010-12.

As a result, households headed by someone aged 65-74 now hold more wealth, despite there being more than twice as many households headed by someone aged 16-44. Recent retirees’ account for almost a fifth (19 per cent) of the UK’s total household wealth, despite making up just 14 per cent of all households.

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 over 60s were least affected by the UK’s pay squeeze.

However, some older households are still likely to face problems in retirement, with one in seven having less than £50,000 in household wealth. This shows that older households are not universally doing better than younger ones, says the Resolution Foundation.

The analysis also looks at the components of wealth for the different age groups before and towards the end of the downturn. Approaching the recession in 2006-08, households aged 16-44 held 22 per cent of property wealth in the UK, dropping to 17 per cent in 2010-12. This compares with the recently retired – a considerably smaller group – which held 17 per cent of UK property wealth in 2006-08, rising to 20 per cent in 2010-12. This in part reflects falling home ownership rates for younger households, says the Foundation.

David Willetts, Executive Chair of the Resolution Foundation, will say in his lecture:

“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.  The wealth of recently retired households has now overtaken that of the one in three households headed by someone under 45 years of age.

“However the notion that all pensioners are doing well financially is false, with one in seven having less than £50,000 in wealth to draw upon throughout their retirement.

“I do not believe that this shift is creating an intergenerational conflict. What we see instead is a considerable transfer of wealth from recent retirees down to their children and grandchildren, for instance by helping them to get on the property ladder.

“But we cannot rely on families alone to offset intergenerational inequalities, particularly if the state transfers wealth in the opposite direction. Such a pattern has serious implications for social mobility.

“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.”

Distribution of total household wealth by age group

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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  1. Victor says:

    It should stand to reason that people should become wealthier as they grow older. The shockingly low rate of house building (social / owner occupied / rented) is forcing up prices making those with substantial property wealth (over and above their mortgage) on paper wealthier, but in the main unable to access that wealth. Meanwhile those that in previous generations would have been able to buy cannot. We need to build more home to house those living longer, the swelling population and the trend for household sizes to get smaller (all mean that more homes are needed).

    But its not the fault of the baby boomers. If their property has increased faster than their mortgage costs its those the lent to the banks and building societies at the time who lost out, not the young of today.
    The government needs to get the UK building and needs to warn people that the likely effect of that is for house prices to stabilise or even fall. On the other hand it will provide employment, tax revenues (income, corporation and stamp duty) and much better housing conditions for many in the population.

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