Pensioners are more likely to pass on their pension pots as inheritance than spend their accumulated wealth during retirement, the Institute of Fiscal Studies (IFS) has found.
The report found that 80 per cent of over 50s are home owners and those aged between 55-64 had a median housing wealth of £185,000, and a median of other wealth, excluding pensions, of around £33,000.
Despite this, a majority would not be expected to move, and of that would, just two-fifths would move for financial reasons.
Research also found that average individuals would draw down 31 per cent of net financial wealth between ages 70 and 90, moving to 39 per cent among the top of the financial wealth distribution.
According to the IFS, the research is in response to lots of attention on the lack of saving amongst the young generations, but very little on how individuals used their wealth in retirement.
Author of the report, Rowena Crawford, said: “These findings suggest that precautionary saving, bequest motives and financial acuity all play a role in individuals’ choices. The result is that the majority of financial wealth is set to be bequeathed rather than spent during retirement.
“This has direct implications for younger generations – they are likely to inherit the majority of their parents’ current financial wealth (in addition to other assets such as housing). Given wealth inequality, some individuals will inherit little, while others will inherit substantial sums.”
