£1trn more wealth in pensions than in property

Adults in the UK have £1trn more wealth in pensions than they do in property, figures from the Office for National Statistics have suggested.

Between 2010 and 2012, the amount of wealth in pensions and property was roughly the same at £3.53trn.

Since then, however, wealth in occupational and private pensions has risen nearly £3trn compared to just under £2trn in properties.

According to analysis by NFU Mutual, this increase means pensions are now worth 42% of total household wealth in Britain compared to property, which represents 36% of household wealth.

“Pensions are often the most valuable asset a person owns, and in many cases worth more than their home,” commented NFU Mutual chartered financial planner, Sean McCann. “Most people have a rough idea of the value of their house, but many would be less confident in estimating the value of their pensions.

“Many invest in a series of pensions throughout their working life, and as a result have a fragmented picture of their pension wealth.”

The analysis of the figures also indicated there was £1.88trn in active occupational defined benefit schemes between 2018 and 20, compared to just £499bn in active defined contribution schemes. There was £2.79trn of wealth in pensions already in payment, and £1.27trn in preserved pension wealth.

McCann continued: “A large portion of Britain’s pension wealth is held in defined benefit schemes which guarantee a certain level of income based on salary. Many people who hold this type of scheme don’t realise how valuable they are.

“Auto-enrolment has increased the number of people saving into defined contribution schemes, which build up a pot over time that will later fund their retirement. Speaking to a financial adviser can help determine how much you should be investing to fund your later life plans.”

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