Older generation outstrips youngsters with savings

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ByIona Bain

The gulf has increased by £332,200 between those in the highest and lowest income brackets for people aged 16 to 49.

From 2006 to 2008, the lowest-earning households headed by younger people had total average savings of £1500 with only an increase to £1800 by 2010.

But the highest-earning households saw their savings rise from £333,700 to £535,800 in the same period.

In the 30-page chapter from the ONS Pension Trends report there was evidence that older people were saving more than younger generations. In households earning more than £10,000, the older age group had between two and five times more savings than younger people across all income brackets.

But pensioners earning below £10,000 bucked the trend, with relatively high level of savings of £119,300. This was also far higher than their younger counterparts compared to other income groups. The data also revealed that three-quarters of households were saving into a pension. The average savings of households headed by 16 to 64 year olds climbed from £54,000 in 2006/20008 to £79,200 in 2008/2010.

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Craig Palfrey, certified financial planner for Cardiff-based Penguin Wealth, said: “What this data reconfirms is that the UK is deeply contrasted between the pension-prepared and the pension-impoverished. For those in the top savings decile to have around eight times as much ‘wealth’ as the bottom five deciles together relays how the UK remains a nation of retirement haves and retirement have-nots.”