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- The total wealth of people aged 60 increased by 46% in a decade, according to a study
According to a new study, people in their 60s have seen a disproportionate increase in their wealth over the past decade, while those in their 30s have lagged behind.
The average total wealth of people aged 65 to 69 increased by £112,567, or 46 per cent, between 2010-11 and 2019-20, research from the UK’s International Longevity Center and M&G shows.
This has been driven by increases in property values and pensions, according to the report.
In comparison, the average increase in wealth for those aged over 30 was just nine per cent, or £6,751.
Those under 40 now own just four percent of the wealth, compared to 7.5 percent in 2010.
Widening gap: total wealth by age group in 2010/11 compared to 2019/2020
Despite this, seven in 10 adults say they receive no financial help from their families, despite the increase in wealth of older households.
Across all age groups, 47 percent worry that they have not saved enough for retirement. For those between 25 and 49 years old, this figure increases to 60 percent.
Pension income needed to live a “moderate” lifestyle in retirement rose 27 per cent in the last year alone, according to data from the Life Savings and Pensions Association.
David Sinclair, chief executive of ILC, said: ‘We have managed to get ourselves into a complete bind.
‘Wealth has become increasingly concentrated among older generations, while younger people struggle to get ahead.
“If we do not act now, these inequalities will only worsen, leaving younger generations facing even greater challenges.”
The ILC and M&G say the ‘intergenerational contract’ – the principle that generations support each other at different times in their lives – is under threat due to this growing inequality.
Furthermore, people are living longer lives: in 2040, a quarter of people will be over 65, up from a fifth today.
Clive Bolton, chief executive of M&G life insurance, said: “It is important because the contribution we make is a down payment on the future support we will receive in old age, as well as providing the support we all need in the early stages of our lives. life”.
“It is a fundamental part of our daily lives – supporting our welfare system, health services, schools and the investment that drives the critical infrastructure that all communities use and depend on.”
The ILC and M&G call for an increase in auto-enrolment contributions to 12 per cent from the current eight per cent, as well as the creation of a “savings culture” and the improvement of investment vehicles that pool investments across generations .
“The upcoming spending review is an opportunity for the Government to work with financial institutions to address the growing wealth gap between young and old,” Sinclair added.
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