16th May 2014
The latest figures on wealth distribution in the UK highlights the recovery in the economy is not closing the gap between rich and poor and a retirement gap is also opening up.
The Office of National Statistics (ONS) has compiled data on UK household wealth between 2010 and 2012 and found that although combined wealth has increased from 2006-08 from £8.4 trillion to £9.5 trillion in 2010-12, there are still stark divides in the country.
The wealthiest 10% of households are 4.8 times wealthier than the bottom 50% of the population and almost a quarter, 24%, of people have no private pension.
Pensions and property make up an almost equal proportion of household wealth; with property accounting for 37% of wealth, and pensions 38%. Other financial wealth makes up 14% of the total and the rest is made up of physical wealth or owned items.
Property pays a large part in UK household wealth, with 11% of families owning a second home.
While the obsession with property continues apace and house prices soar, this is overshadowing the concerns around lack of pension provision and another stark divide in pension wealth.
The large amount of pension wealth in the country is concentrated into just a small number of hands. A total of 48% of the UK’s entire £3.59 trillion pension wealth is held by just 10% of households and the bottom 50% of the country has just 8% of pension wealth.
On top of this just 34% of adults contributed to a pension in 2010-12, with those in public sector more likely to contribute than those in the private sector and men building up a more substantial pot than women.
Steve Wilkie, director of retirement specialists Responsible Life, said: ‘The gap between pension haves and have-nots is clearly as wide as ever. With nearly a quarter of all households having made no provisions for retirement outside of their state pension – the future is looking bleak for millions of people across the UK.
‘Despite numerous appeals by the pensions industry and government, many people still have their heads well and truly buried in the sand when it comes to funding their retirement. The message simply isn’t getting through.’
He added he hoped the changes made in the Budget to give pensioners more freedom with their pension pots would encourage more people to save as they would not feel pensions no longer lock away their money.
‘Once the raft of recommended changes to the pensions system in this year’s Budget bed in, more of us should feel emboldened to take an interest in – and take change of – our retirement plans,’ he said.