Beyond the numbers – understanding the wealth of our older population
By: Arunima Himawan
Last year, a report by Netwealth, which found that one in five “boomers” are millionaires, gained a great deal of media attention. This is just one example of a common discourse in the media of those aged 65 or over, or “boomers”, having overly benefitted financially across their life course, often at the expense of younger generations.
ILC thinks framing older people this way is simplistic and dangerous because it can draw false conclusions about the wealth of our older population. As argued in our recent factpack on the diversity of our older population, simplistic narratives and conjecture ignore issues such as the enduring socio-economic inequalities older people face and the clear diversity of our older population. As the world tries to contain the spread of the coronavirus, it has become more important than ever that generations need to be working together, not against each other to solve our big societal issues. In the context of an ageing society especially, more of us are likely to be susceptible to the virus and feel the economic impact of the pandemic. As such, we will need a novel approach to policymaking, which takes into account the diverse needs of older and younger people – both now and in the future.
As we all know, “wealth” is a complex and subjective measure and is not just about hard cash in people’s bank accounts. ILC is very much aware that media reports on older people’s wealth do not always make distinctions clear and can be highly misleading.
Our analysis of the Netwealth data shows that older people’s wealth is concentrated among those aged between 65-74, rather than spread across our older population. In fact, median total wealth is at its highest for those aged between 55-64, which is unsurprising as people at this age are most likely still employed and not yet drawing down from their pension wealth. Those aged 65-74 are the second-wealthiest cohort across the population, however, after the age of 75, median wealth drops significantly.
There is no denying that some pensioners are financially wealthy, but we cannot ignore the fact that many have their wealth firmly earmarked to support them in later life when they are without a regular income. The Association of British Insurers finds that nine out of ten over-65s cannot afford social care, so it is likely that older adults will have to use whatever remaining wealth they have (often housing wealth) to pay for it. While having other sources of wealth (besides income) can mean the difference between struggling to make ends meet and feeling financially secure, vast wealth disparities between those aged 65 and over remain. It is also universally accepted that there are very narrow margins between being comfortably off to slipping into relative poverty. And indeed, pensioner poverty has been on the rise since 2012/13, with one in six over-65s living in poverty.
Today, evidence finds that the coronavirus is further widening inequalities in wealth as well as health. Many older adults still in employment but already at risk of losing their jobs and exiting the labour market for good, are now faced with even greater job insecurity. Self-employed (see ILC’s recent policy briefing on the current status relating to older workers who are self-employed) and gig-economy workers are particularly vulnerable. For this reason, ILC has long argued that society, especially during these times when we are re-evaluating what matters most, cannot make sweeping generalisations about our older population.
We rely on policymakers (and good policy) to support us. It is essential therefore that policy and practice can appropriately respond to the needs of younger and older people alike. That said, we risk leaving a huge proportion of older people behind – often those most in need of our help – if we continue misrepresenting the older generation and fail to acknowledge the diverse and rich picture of what later life looks like.
This year’s Future of Ageing: Together for tomorrow conference will delve deeper into these issues to explore how we can make policy and practice work for today’s as well as tomorrow’s older and younger people. More information on the conference programme and how to register is available from our conference page.
Research Fellow, ILC
Arun joined the ILC in March 2019 as a Research Fellow. Arun has mainly worked in the charity sector, most recently within higher education at Goldsmiths College and University of East Anglia’s Students’ Unions in policy and research roles working to improve the barriers facing marginalised students. In both roles, she has acted as a policy advisor, influencing internal university policy and has produced a number of in-depth pieces of research on a wide range of topics such as: religion and belief; mental health; and consumer law.