I wrote a piece for Pensions Expert on the rise in state pension age to 67 starting in April.
It's worth paying attention to how this lands – for households but also in public debate. That could shape when/how increases to 68 and beyond get legislated.
www.pensions-expert.com/law-and-regu...
So as with many headline stats, while this figure is ‘true’ based on the survey data we have, there is a lot of nuance when it comes to understanding what it really means.
Also – what a ‘millionaire’ means is changing over time. It refers to a fixed pound amount, so it is a very different thing now than in the past. To be a millionaire in 1990s prices you’d need £2.5m today!
And those with defined benefit (final salary) pensions may not realise the value of the guaranteed pension payments until death. To purchase a guaranteed income of £20k per year until death at age 65 (inflation-protected) would currently cost about £370k in the private market.
Second, this measure includes housing and pension wealth.
People who purchased their homes decades ago will have benefitted from strong house price growth and may be living in high value houses while having modest incomes.
Firstly, based on this figure two people living in a household with exactly £1m in wealth would count as two millionaires.
If we divide wealth by number of people in the household, we find that 9% of the 65+ live in a household that has >£1m of wealth per person.
This figure comes from ONS stats (based on a household survey), which show that 22% of people aged 65+ live in households with more than £1m in wealth.
But these people may not all feel as well off as you might think of a millionaire.
I had a great time chatting about older people with
@timharford.ft.com on BBC4 More or Less. The starting question was – are one in four pensioners really millionaires? Quick thread below: www.bbc.co.uk/sounds/play/...
Today’s inflation figure of 3.8% will be used for most benefit uprating next April. But state pension will rise in line with triple lock – based on earnings growth of 4.8%.
Below is my @theifs.bsky.social piece on issues around the triple lock and what we think is a better alternative.
The OBR's Fiscal Risks and Sustainability report is out today with a chapter on the UK's pension system.
This is important and timely, setting out key challenges for the future. For proposals on how to address them you should check out our Pensions Review report from last week, thread below 👇
Had a good chat on
@moneybox.bsky.social with @paullewismoney.bsky.social
about our Pensions Review work and what we should do about the triple lock and automatic enrolment – you can listen to it here:
bbc.co.uk/sounds/play/...
NEW:The government continues to increase the state pension age. Next year it’ll start going up from 66 to 67.
Some people choose to - or need to - work longer as a result. Does it run down their health? Or can work keep you young?
We investigated for women whose pension age rose in the 2010s… 1/
Today the government announced more detail on how they plan to tackle the large number of small pots in the UK pension system.
The reforms are due to be announced in the upcoming Pension Schemes bill this spring.
A few thoughts on why this matters and what was announced. 👇
State pension age starts rising again in April 2026. Most people in their early 60s know their state pension age, but a significant minority are incorrect or unaware.
This is worrying as people may base retirement and saving decisions on incorrect information. Short thread👇
We’ve written two new reports on the decisions people face when drawing on private pension wealth in retirement & policy reforms that might help improve these decisions. Important to get this right as defined contribution pensions get more important & can now be accessed flexibly. Thread below: