UK pension wealth almost £1trn more than property wealth

Britons have nearly £1trn more wealth in pensions than they do in property, according to figures from the Office of National Statistics (ONS).

The statistics showed that, in 2018-2020, occupational and private pension wealth was estimated at £6.45trn, whilst property wealth in the UK was estimated at £5.46trn.

However, the gap had decreased slightly when compared to 2016-2018, falling from £1trn to £0.99trn.

According to the figures, wealth in pensions had increased by nearly £3trn since 2008-2010, while wealth in property had increased by just under £2trn during the same period.

This trend of pension wealth being greater than property wealth did not exist in every area of the UK, the ONS also revealed.

Property wealth in London was £1.11trn during the period 2018-2020, representing 49 per cent of total wealth in the area, compared to pension wealth which was £682bn, only 30 per cent of total wealth.

London was not the only area to have higher property wealth, as the South East also saw this gap present, although its difference was only £0.01trn between its property and pension wealth.

All other regions revealed pension wealth that was greater than property wealth, with the biggest gap being present in Scotland at £284bn in property wealth compared to £604bn in pension wealth.

NFU Mutual chartered financial planner, Sean McCann, commented: “Pensions are often the most valuable asset a person owns, and in many cases worth more than their home.

“Most people have a rough idea of the values 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 a result have a fragmented picture of their pension wealth.”

The ONS also revealed that the UK’s pension wealth was split amongst four main sections, with £1.88trn in active occupational defined benefit schemes, £499bn in active defined contribution schemes, £2.79trn of wealth in pensions already in payment and £1.27trn in preserved pension wealth.

McCann added: “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.”

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