Wealth

This paper examines the behavioural response of households to wealth transfer taxation using household survey data from Japan, with particular attention being paid to the implications of different bequest motives that households may have.

The “annuity puzzle” refers to the fact that annuities are rarely purchased despite the longevity insurance they provide. Most explanations for this puzzle assume that indi-viduals have accurate expectations about their future survival. We provide evidence that individuals misperceive their mortality risk, and study the demand for annuities in a setting where annuities are priced by insurers on the basis of objectively-measured survival probabilities but in which individuals make purchasing decisions based on their own subjective survival probabilities. Subjective expectations have the capacity to explain significant rates of non-annuitization, yielding a quantitatively important explanation for the annuity puzzle.

We study theoretically and empirically the demand for microcredit under different liability arrangements and risk environments.

This report examines changes in the distribution of household incomes in the UK, and the determinants and consequences of recent trends. This includes analysing changes not only in average living standards but also in household income inequality and measures of income poverty and deprivation.

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’ assessment of the financial preparedness for later life of current younger individuals. Housing mobility at older age also has implications for the turnover and appropriateness of the housing stock.

In this briefing note, we examine how individuals’ financial wealth evolves as they age through retirement.

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. 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.

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 presents, with older generations able to provide assistance to younger generations and pass down their accumulated experience and wisdom. However, such changes are, of course, not without challenges.

Key Points Question What is the association between various socioeconomic markers and dementia incidence? Findings This longitudinal cohort study found that lower wealth in late life, but not education, was associated with increased risk for dementia, suggesting that people with fewer financial resources were at higher risk. No substantive differences were identified in relation to the area of neighborhood deprivation; an age-cohort effect was observed, highlighting that socioeconomic inequalities were more robust among people born in later years. Meaning The association between socioeconomic status and dementia incidence in a contemporary cohort of older adults may be driven by wealth rather than education.

We look at how strongly shocks to asset values affect labour supply, using Italian data.

Wealth-associated disparities in death and disability in the United States and England

In this report, we estimate what has happened since 2015–16 to household incomes and poverty rates.

We document that households in the UK with extremely low measured income tend to spend much more than those with merely moderately low income. This phenomenon is evident throughout three decades worth of microdata and across different employment states, levels of education and marital statuses.