Over 50s lose £60k each because of downturn
So where has the money gone, and what can they do about it?
The studyThe research, by the Institute of Fiscal Studies, found that older people have lost an average of 10% of their wealth as a result of the financial crisis. Roughly half of the loss has been in the value of their home, while the other half has been eroded as stock market falls have damaged the value of investments linked to the markets.
The wealthier the household, the more they are likely to have been hit by the crisis - because they have more money tied up in property and investments. It means that the least well-off fifth of the population saw their wealth fall just under 5% (£9,400), while the wealthiest lost 13% - or £162,000 on average.
Concern?There will be those who will argue that these assets were always at risk, and that perhaps some of the wealthiest people have quite enough to manage on - so can sustain these falls.
The authors of the report also highlighted that compared to younger generations, most of these people are protected to a far greater degree, because their rights to a defined benefit pension are already guaranteed - and will not be affected by the financial crisis. Younger people, on defined contribution pensions, would stand to lose even more because the value of their pension would fall as well.
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However, these people have often saved and made sacrifices in order to build up a level of wealth to protect their financial future. The timing of the financial crisis means they will have little opportunity to make these losses up.
Commenting on the results, Rowena Crawford, a senior research economist at the IFS and one of the authors of this report, said: "On average the richest fifth of individuals saw their household wealth fall by 13% or £162,000 – this at a stage in their life when they are most unlikely to be able to make up these losses later on."
ImpactMany of these people still have enough to get by on in later life. They simply said they would have less wealth to leave to their family after their death. This could be a blow for their adult children, who are sleepwalking into retirement, hoping to rely on an inheritance to make up the shortfall in their own retirement planning.
Those who have seen their wealth drop below the level they are happy living on in retirement have two options: they can either work even harder and make even more sacrifices in the years leading up to their retirement - or they can work on for longer than they had intended.
A report by the Pension Policy Institute found that half the workers aged between 50 and the State Pension Age will have to work at least six years past their retirement age - and most at least 11 years - if they want to maintain a reasonable standard of living.