Pensioners more likely to leave pots as inheritance - IFS

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.”

    Share Story:

Recent Stories


A changing DC market
In our latest Pensions Age video interview, Aon DC senior partner and head of DC consulting, Ben Roe, speaks to Laura Blows about the latest changes and challenges within the DC sector

Being retirement ready
Gavin Lewis, Head of UK and Ireland Institutional at BlackRock, talks to Francesca Fabrizi about the BlackRock 2024 UK Read on Retirement report, 'Ready or not. How are we feeling about retirement?’

Podcast: Who matters most in pensions?
In the latest Pensions Age podcast, Francesca Fabrizi speaks to Capita Pension Solutions global practice leader & chief revenue officer, Stuart Heatley, about who matters most in pensions and how to best meet their needs
Podcast: A look at asset-backed securities
Royal London Asset Management head of ABS, Jeremy Deacon, chats about asset-backed securities (ABS) in our latest Pensions Age podcast

Advertisement Advertisement Advertisement