Retirees are holding on to wealth

Pensioners are seemingly hoarding wealth in retirement rather than indulging themselves, according to a report that suggests bequests will surge in the decades ahead as the baby boomer generation dies.

The analysis is likely to provide more reassurance to those concerned that retirees will spend their defined contribution pension funds inappropriately quickly and then regret that decision.

In fact he biggest concern about pension freedoms is far more about excessively cautious retirees spending too slowly than it is about reckless retirees blowing their pension savings on lavish living.

The research also suggested financial wealth was on average drawn down - but only slowly. Observed behaviour suggests, on average, individuals will draw down just 31% of net financial wealth between the ages of 70 and 90.

Even among individuals in the top half of the financial wealth distribution, net financial wealth looks to be drawn down by just 39%, on average. As such the message is clear that the vast majority of pensioners leave unspent wealth at the end of their lives.

To discuss this in further detail please contact Glen Callow on 0121 711 6353