The golden generation

People aged over 50 are collectively benefiting from an unprecedented level of personal wealth, according to research from Abbey Savings. The personal household wealth of the 50+ generation has rocketed 45.6 per cent in the past five years to in excess of five trillion pounds.

At 2006 levels, this means the personal wealth of this demographic is greater than the annual GDP of every nation except the USA. Astonishingly, it is also greater than the combined GDP’s of Germany, UK and France. This underlies the financial and social power held by this demographic, which owns nearly 75 per cent of the UK’s wealth.

Figures from the Central Intelligence Agency (CIA) World Factbook. Gross Domestic Product (GDP) figures are at Purchasing Power Parity (PPP). Converted into dollars at rate of 1.96, the average exchange rate from 1 January to 25 April 2007. This figure is Net Personal Household Wealth (Source: Office of National Statistics).

On current projections, the 50+ generation are likely to become even more influential. This segment currently comprises 34 per cent of the population. However, in 25 years time, the 50+ population is likely to grow to 29 million and account for 43 per cent of the population.

If personal wealth continues to grow at the rates of the past five years, then this segment of the population will hold personal wealth worth $78.3 trillion (or £40 trillion by 2043. This is six times the current annual US GDP.

Reza Attar-Zadeh, Head of Savings at Abbey, said: “The 50+ segment of society is already transforming the way we live and work. They hold 60 per cent of all savings and are responsible for over 40 per cent of all consumer demand.

“If personal wealth and population continue to grow at current rates, the 50+ demographic will become even more dominant.

“Of course we recognise that not everyone will benefit from this explosion of personal wealth. However, Abbey has recently launched the 50+ Saver account, offering highly competitive rates to further encourage saving for those approaching retirement.”

Abbey’s 50+ Saver account is designed exclusively for people aged 50 or over. It offers up to 5.80 per cent interest, and guarantees to move in line with any changes in the Bank of England base rate until July 2008.