Average UK Net Worth by Age: Understanding Pensions, Property, and Financial Assets

YouTube video

When it comes to personal savings and retirement planning, it can be incredibly difficult to know if we are saving enough. We often compare ourselves to our peers and colleagues, wondering how much they have saved at their age. While it’s important to focus on our own financial goals, it can be interesting to understand the average and median savings and net worth in the UK.

In this article, we will be using data from the Office for National Statistics (ONS) Wealth and Asset Survey and tables by Nimble Fins to explore the total household savings, savings rate, and average and median household and individual wealth in the UK. It’s important to note that these figures provide a UK-wide analysis, and the standard of living and required assets may vary depending on your location and personal situation.

Understanding the Difference between Average and Median:

Before we dive into the statistics, it’s crucial to understand the difference between the average and median figures. The average is calculated by dividing the total sum by the number of households, but it can be skewed by a small number of households with high savings levels. The median, on the other hand, is the middle number in a set of data, providing a more realistic and usable result that isn’t influenced by outliers.

Average Household Savings and Median Gross Savings:

According to the data, the average savings rate per household in the UK is £76,301. However, it’s important to note that most households have less than this average due to a small number of households with very high savings rates. The median gross savings in the UK is a far lower figure of £12,500, which means that 50% of households have more savings than this amount, while the other 50% have less. It’s worth mentioning that 25% of households have less than £2,100 saved.

Types of Household Savings:

To further understand the breakdown of savings, let’s explore the typical balances for different types of savings accounts. The median amounts saved in these accounts are as follows:

  • Current accounts: £2,000
  • Cash ISAs: £12,000
  • Stocks and shares ISAs: £31,000
  • National savings certificates and bonds: £1,200

Understanding Total Household Wealth:

The median total wealth per household in the UK is £302,500. However, the average figure is significantly higher at £576,000. This difference is primarily due to some very wealthy households, which skew the average higher than the median. It’s essential to note that the average is nearly twice the amount of the median.

The median total wealth is comprised of four types of wealth:

  1. Net Financial Wealth: This includes the value of financial assets, such as savings accounts, ISAs, endowments, stocks, and shares.
  2. Physical Wealth: This refers to the self-reported value of household contents, possessions, and valuable items like art and antiques.
  3. Private Pension Wealth: This is the value of accrued pension plans, including personal and occupational pensions, but does not include state pensions.
  4. Net Property Wealth: This includes the self-reported value of owned property, including the main residence and other properties in the UK or abroad.

Average and Median Wealth by Age:

Now, let’s examine the average and median wealth by age in the UK. Please refer to the table below for a detailed breakdown:

| Age Range | Physical Wealth | Private Pension Wealth | Financial Wealth |
|————|—————-|————————|—————–|
| 20-24 | £0 | £0 | £0 |
| 25-29 | £0 | £0 | £0 |
| 30-34 | £21,000 | £9,000 | £6,500 |
| 35-39 | £45,000 | £46,000 | £9,000 |
| 40-44 | £84,000 | £59,000 | £20,000 |
| 45-49 | £112,000 | £80,000 | £27,000 |
| 50-54 | £146,000 | £145,000 | £31,000 |
| 55-59 | £193,000 | £180,000 | £35,000 |
| 60-64 | £209,000 | £127,000 | £10,600 |

It’s evident from the table that wealth accumulates over time, with increases in property values, mortgage payments, and savings contributions. Notably, there is a significant jump in wealth between the ages of 35-39 and 40-44, suggesting that individuals are taking their finances more seriously during this period.

Private Pension Wealth at different ages:

Looking specifically at private pension wealth, here are the approximate figures:

  • Age 55-59: Average – £418,000, Median – £180,000
  • Age 60-64: Average – £483,000, Median – £127,000

Please bear in mind that these figures are averages and medians and may vary depending on individual circumstances. However, they provide a general idea of the amount of pension income that could be derived from these levels of wealth.

Median Wealth per Adult:

To understand individual circumstances better, let’s break down the median wealth per adult:

  • Age 55-59: £89,000
  • Age 60-64: £127,000

These figures give us a more realistic picture of individual wealth in the UK. It’s worth noting that a significant portion of wealth comes from property and private pension assets.

Conclusion:

Understanding the average and median net worth by age in the UK provides valuable insight into the savings and wealth accumulation of individuals. While the average figures may be skewed by a small number of wealthy households, the median figures offer a more realistic representation of the wealth distribution. It’s essential to remember that these figures are averages and medians and can vary depending on individual circumstances, location, and specific financial goals. However, by analyzing these statistics, individuals can gain a better understanding of their financial position and make informed decisions for their future financial well-being.