New analysis by IFS researchers, commissioned by the Department for Work and Pensions, uses data from the Wealth and Assets Survey (2006/08) to examine wealth holdings among households in Britain just before the financial crisis hit in 2008, and considers what this might mean for the future retirement resources of current workers and how it might have been affected by the large asset price changes during 2008 and 2009.

Considerable variation in the amount of wealth that households hold and how they hold it means that some will have been more exposed to falling asset prices during 2008 and 2009 than others. We estimate that the best off will have lost most - households headed by someone aged 55-74 with a degree level qualification will, we estimate, have lost on average about £25,000 as a result of asset price falls between 2007 and autumn 2009. Less well off households will have lost less in absolute terms, both because they held less wealth initially and because they held it in safer assets. Households headed by someone aged under 35 with no qualifications will, we estimate, have lost less than £2,000 on average. Across all households headed by someone with below degree level qualifications, the asset price falls will, we estimate, have knocked on average 5% to 6% off gross wealth.

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