Prices of real and financial assets fell substantially in the UK during 2008–09. The fourth wave of the English Longitudinal Study of Ageing (ELSA) was in the field throughout this ‘financial crisis’. We use these data, and earlier ELSA waves, to document the effect of the crisis on those aged 50 and over in England, importantly taking into account that a significant proportion of the wealth of these households is held in forms such as state pensions that will not be directly affected by movements in asset prices. We find that the median fall in wealth among individuals was 8 per cent of total household gross wealth with, on average, richer individuals having experienced a larger decline. We find some evidence that those who experienced greater wealth shocks were more likely to reduce their expected chance of leaving a large bequest and to reduce their spending on certain ‘semi-luxury’ items such as clothing and food consumed out of the home.
Authors
CPP Co-Director
James is Senior Research Fellow and Professor of Economics at Manchester, working on broad issues in the economics of retirement, savings and health.
Deputy Director
Carl, a Deputy Director, is an editor of the IFS Green Budget, is expert on the UK pension system and sits on the Social Security Advisory Committee.
Research Fellow University of Michigan
Tom is a Research Fellow at IFS, a Research Professor for the Institute for Social Research at the University of Michigan.
Rowena Crawford
Journal article details
- Publisher
- Wiley Blackwell
- ISSN
- Print 0143-5671 Online:1475-5890
- JEL
- D12, D14, E21, G01, G11
- Issue
- June 2013
Suggested citation
Banks, J et al. (2013). 'Financial Crisis Wealth Losses and Responses among Older Households in England' (2013)
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