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Home Publications Cash and Pensions: Have the elderly in England saved optimally for retirement?

Cash and Pensions: Have the elderly in England saved optimally for retirement?

IFS Working Paper W14/22

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.

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This presentation was delivered to delegates attending the conference, "Household Wealth Data and Public Policy", organised by IFS and Public Economics UK, which took place on 9-10 March 2015.
Press release
New IFS research shows that the vast majority of couples born in the 1940s have levels of wealth that are more than sufficient to maintain their standards of living into and through retirement.
The ELSA Research team consist of several collaborators; University College London (UCL), Institute for Fiscal Studies (IFS), University of Manchester (UoM), and NatCen Social Research.