INSPIRE: The Rise of the Pensioner Millionaires
More than one million pensioner households in the UK now have total wealth of more than £1m according to analysis by Prudential of the latest ONS data for 2010-2012.
The analysis shows that the number of millionaire pensioner households has soared by 69% compared with 2006-2008 when the number stood at just over 636,000. This means that more than one in 10 (11%) of over-65 households now have total wealth of more than £1 million, an increase from 7% in 2006-2008.
The over-65s as a group also have a greater proportion of millionaires than the country as a whole – 11% compared with the nine per cent of all UK households that are worth more than £1 million. Prudential’s analysis found that the rise in the number of pensioner millionaires is thanks to a significant increase in the average value of pension assets, an increase in the value of the other financial assets held by retired households, and a rise in the average value of property assets for pensioner couples.
The median value of private pension assets – excluding those who have no private pension provision – has increased to £82,300 in the most recent figures, up from £60,000 in 2006-2008. The number of people who have some private pension wealth has also increased during this period, to 76% from 73%. Savings and investments have also made a considerable contribution to the growth in the number of pensioner millionaires. 19% of over-65 households now have savings and investments worth more than £100,000 – an increase from 15 per cent in 2006-2008. In terms of bricks and mortar, average net property value for a retired couple is £210,000 – an increase from £200,000 in 2006-2008. However, for single pensioners the figure has fallen slightly, to £165,000 from £170,000 in 2006-2008.
Vince Smith-Hughes, retirement expert at Prudential, said:
“These results challenge a few commonly-held perceptions. For example, it is perhaps surprising that the proportion of pensioner wealth accounted for by pension assets and savings and investments has grown far quicker than the relative value of property assets over the last few years. The figures underline the importance of people saving as much as possible as early as possible in their working lives, to enable them to secure a comfortable income in retirement. Even those who will fall into the growing number of pensioner millionaires when they retire need to consider their income options. A professional financial adviser or retirement specialist can help retirees make the right decisions when the time comes to draw a retirement income from their accumulated assets.”
Prudential’s analysis also shows that at the other end of the spectrum, 12% of pensioner households are worth less than £40,000, a slightly larger proportion than those who are millionaires (11%). The analysis also shows that, unfortunately and a cause for great concern, one in eight over-65 year-old households (12%) have net savings and investments worth less than £500.Subscribe to our newsletter
Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.
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