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The use of wealth in retirement

Briefing note

There has been lots of recent research and debate on individuals’ accumulation of wealth for retirement, driven by the concern that younger generations are not saving enough. Much less attention, however, has been paid to how individuals use their wealth once in retirement. This is an important omission, since understanding more about the evolution of wealth in retirement can help shed light on:

  • the extent to which such wealth is currently used to finance spending needs in retirement (and, therefore, the extent to which younger generations may need to accumulate similar sums in order to have similar standards of living in retirement);
  • the extent to which current retired generations’ wealth is likely to be bequeathed (which has direct consequences for the resources of later generations);
  • how people manage their resources through retirement (which is of increased importance given the introduction of ‘pension freedoms’).

In this note, we summarise the findings of recent and new IFS research addressing this omission and considering the use of different components of wealth in retirement.

Find out more

Report
The ageing of the population is one of the biggest changes facing society today. People are living longer, remaining healthier at older ages, and working and engaging in society for longer. This is an achievement that should be celebrated, both in its own right and for the opportunities it ...
Presentation
In this presentation, IFS researchers draw together the conclusions of a programme of research carried out over the last two years, which sheds light on individuals’ saving for retirement and how different sources of wealth are drawn on through retirement.
Briefing note
The extent to which people draw on their housing wealth in later life is an important issue, with implications for the living standards of current older individuals and their use of other financial resources, the likely bequests that will be received by younger generations, and policymakers’ ...
Briefing note
In this briefing note, we examine how individuals’ financial wealth evolves as they age through retirement.
Press release
Older people in England, on average, hold a lot of wealth. For example, among those aged 55-64 (i.e. on the eve of retirement) median housing wealth is £185,000 and median other wealth (excluding pensions) is around £33,000. A set of new reports – funded by the IFS Retirement Savings Consortium ...
Newspaper article
We are constantly being lectured about how we should save more for our retirements. Maybe we should. But what happens next? It’s all very well having assets when you get to retirement age, but that still leaves another 20 years or more to manage and make use of them. How we do that can have as ...