THE FINANCIAL crisis has knocked 10 per cent off the average wealth of Britons aged 50 and over, according to figures released this morning by the Institute for Fiscal Studies (IFS).
People in the 50-plus age bracket are £60,000 worse off, on average, as a result of the crisis, with wealthier individuals hit the hardest.
“The mean loss among the least wealthy fifth was 4.6 per cent of total gross wealth or £9,400, increasing to 12.9 per cent – or £162,000 – among the richest fifth,” the IFS said.
The wealthiest quintile saw over half the hit come from a dip in funds exposed to stock markets, while just under half came from drops in the value of property.
“The losses occurred despite accumulated rights to defined benefit pensions being insulated from these shocks,” commented IFS economist Rowena Crawford.
“Future generations of private sector employees will be much less able to benefit from this protection and are likely to be more exposed to asset price shocks.”
Yet Britons approaching retirement are reasonably well prepared, according to a separate study also released by the IFS this morning.
A “large majority” of people aged between 50 and the state pension age will be able to rake in post-retirement income at a level that equates to 80 per cent or more of their current working income, the IFS said.
This includes private savings, expected inheritances, pension credit and the return that owner-occupiers get from living in their homes, as well as state and private pensions.
Yet across the working population as a whole, over half (52 per cent) of British employees are worried about their funds for retirement, according to a survey released by consultants Towers Watson today.
And nearly half (47 per cent) now expect to retire later than they had originally planned.
Meanwhile the Chartered Institute of Personnel and Development (CIPD) said that “increasing pensions costs” has moved into the top 10 of employers’ concerns.