Downloads
WP201422.pdf
PDF | 717.89 KB
Using a model where households can save in either a safe asset or in an illiquid, tax-advantaged pension, we assess the extent to which those who recently reached the state pension age in the UK have saved optimally for retirement. The policy environment specified closely matches that prevailing in the UK. Using the model and administrative data linked with survey data from the English Longitudinal Study of Ageing, an optimal level of wealth is calculated for each household. This is compared to the levels of wealth observed in the data. Our results show that, for those born in the 1940s, the vast majority of households have wealth levels far greater than necessary to maintain their living standards into and through retirement.
Authors
Research Associate Yale University
Cormac is a Research Associate of the IFS, an Assistant Professor of Economics at the Yale University and Research Fellow at the NBER.
Rowena Crawford
Working Paper details
- DOI
- 10.1920/wp.ifs.2014.1422
- Publisher
- Institute for Fiscal Studies
Suggested citation
Crawford, R and O'Dea, C. (2014). Cash and Pensions: Have the elderly in England saved optimally for retirement?. London: Institute for Fiscal Studies. Available at: https://ifs.org.uk/publications/cash-and-pensions-have-elderly-england-saved-optimally-retirement (accessed: 28 March 2024).
More from IFS
Understand this issue
Where next for the state pension?
13 December 2023
Social mobility and wealth
12 December 2023
Autumn Statement 2023: IFS analysis
23 November 2023
Policy analysis
Recent trends in public sector pay
26 March 2024
Living standards since the last election
21 March 2024
Major challenges for education in Wales
21 March 2024
Academic research
Social skills and the individual wage growth of less educated workers
27 March 2024
House price rises and borrowing to invest
27 March 2024
Household responses to trade shocks
26 March 2024