The personal wealth of the over-fifties in Britain makes them the richest generation in history. It's great to be a senior saver!
Given the success of television programmes such as Grumpy Old Men and Grumpy Old Women, you might imagine that middle-aged Brits spend too much time grumbling about life's little irritations. However, the UK's over-fifties have many reasons to be cheerful -- not least the fact that they are the richest generation in British history.
In the UK, people aged over fifty account for a third of the population, or a total of twenty million people. However, according to a report from the savings arm of bank Abbey, this "Golden Generation" owns three-quarters (75%) of the UK's entire net wealth. In other words, this group owns £5.16 trillion of the UK's total wealth of £6.89 trillion.
Five trillion pounds is such a massive sum that it's difficult to appreciate just how big it is. Thus, Abbey has calculated that the personal wealth of the Golden Generation is larger than the annual GDP (Gross Domestic Product) of every country in the world, bar the USA, as the following table shows:
Country | Population (million) | 2006 GDP (£ trillion) |
|---|---|---|
USA | 301 | 6.62 |
The Golden Generation | 20 | 5.16 |
China | 1,321 | 5.10 |
Japan | 127 | 2.15 |
India | 1,129 | 2.06 |
Germany | 82 | 1.31 |
UK | 60 | 0.96 |
France | 63 | 0.95 |
Sources: Abbey Savings; Central Intelligence Agency World Factbook
As you can see, the wealth of the Golden Generation is almost as great as the annual GDP of Japan, Germany, the UK and France combined. What's more, senior savers are getting richer at a rapid rate, as their wealth has increased by almost half (46%) in the past five years. Thanks to increasing longevity, the over-fifty generation is set to become even more influential. In 25 years' time, the over-fifty population may exceed 29 million people, or three-sevenths (43%) of the total.
Naturally, financial firms haven't been slow to take advantage of this demographic shift. Indeed, there are dozens of organisations and products aimed at helping the over-fifties to spend, save and invest. Chief among chasers of the 'grey pound' are SAGA and RIAS (Retirement Insurance Advisory Service), plus charities Age Concern and Help the Aged.
In addition, there are dozens of savings accounts which are specifically aimed at senior savers. According to the Fool's independent, unbiased savings account search engine, annual interest rates for the best 50+ savings accounts range from 5.40% AER to a tidy 6.00% AER. So, if you're over fifty and looking for a home for your emergency fund, rainy-day money or nest egg, then check out the special offers from Coventry BS, Northern Rock, Kent Reliance BS and Market Harborough BS.
Finally, although average wealth among the over-fifties comes to roughly £258,000 apiece, remember that this average is distorted by the super-wealthy folk who own the majority of all the UK's assets. Although it may indeed be "great to be grey" for much of the older population, others get by on modest incomes and small savings pots. So, if you don't want to end up as a grumpy old man/woman, make sure that your money-management skills mature and ripen as the years fly by!