Are you wealthy for your age? Property, pensions, savings and investments

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Pension and tax rules can change, and benefits depend on personal circumstances. Investments can fall as well as rise in value, so you could get back less than you invest.

Full podcast episode transcript

[0:09] Sarah Coles: Hello and welcome to the Switch Your Money On podcast from Hargreaves Lansdown. My name is Sarah Coles – I’m Head of Personal Finance here.

[0:15] Helen Morrissey: And I’m Helen Morrissey – Head of Retirement Analysis.

[0:19] Sarah Coles: And – because we’re nerds – this week, we’ve spent a lot of time calculating the impact of inflation. And, because we’re nerds of imagination, we’ve decided to explore its impact on a National Lottery jackpot of a million quid!

So, we’re looking at... since the draw started in 1994, you could win a million pounds by then – so, in order to win an amount of money that’s equal in spending power... this time round, you would have to win more than £2.1m. So, apparently, a million pounds isn’t quite what it once was.

That, then, got us thinking about, ‘Well....’ – and, actually, what it means to be wealthy.

[0:51] Helen Morrissey: It’s a complicated one, isn’t it, Sarah? – because, I think, many people would qualify, but they don’t actually feel wealthy - whereas, other people feel like it’s an impossible task to get there. So, we’re gonna take a bit of time – have a look at the issue of wealth – whether you’re wealthy for your age and, ‘What can you do about it if you’re not?’

[1:12] Sarah Coles: Yes – ‘cause I think one of the issues is... if you’re looking, fundamentally, at how much wealth people have built, it tends to be that, the older you are, the wealthier you are.

[1:20] Helen Morrissey: Yes – so, when we look at the wealthiest groups, by and large, it is the older people – exactly what you say there, Sarah. So, figures from the Office for National Statistics show that total wealth tends to peak in relatively early retirement – so between the ages of around 65 and 74 – and, on average, this group has just over £500,000. Two-fifths of this would be the value of their property – and then just over a third is pensions wealth. Around a sixth is gonna be things like savings and investments, and the rest is their belongings.

Now, they’ve been saving all their lives – and they are on the cusp of retirement – a major life change – so it does actually make sense that they’ve got the most, when you think about it. However, it’s really important to say that this isn’t wealth just for the sake of it – it does have a job to do, and that is to provide an income in retirement. So, new pensioners might be wealthier on paper – than any other age group – but that doesn’t necessarily mean that they feel rich.

[2:23] Sarah Coles: When you talk about £500,000, seems like a huge amount of money – but, actually, when you cut things slightly differently – and look at the 10 per cent of wealthy people across the different age groups – then that starts to get into the realms of the ‘Phenomenal’ – because the top 10 per cent of people actually have wealth of over £1.2m.

Now, again, that’s a combination of property, pensions, investments, and their general belongings – but even they might not feel wealthy because they might have a large mortgage – or they might have outgoings. So, even with wealth like this, you can get to the end of the month and just wonder where on earth all your money’s gone.

[2:54] Helen Morrissey; Absolutely – and I think, as well, the other issue is that... when we bandy around figures like that – you know, £1.2m... that can feel a bit off-putting for those who are younger or maybe a bit further off that kind of goal – and, as I say, I do think particularly younger people might be a bit off-put by that.

[3:12] Sarah Coles: Yes – and especially when you look at the average figures. So, if you look at a household that’s headed by someone who’s aged 16-24, they have average total wealth of £15,200 – and you can imagine looking at, ‘Oh, my goodness – I’m never gonna get to...

[3:26] Helen Morrissey: Yes.

[3:26] ...half a million – a million – because there’s such a mountain to climb.’

Average household wealth amongst households where the age is 65-74 is 33 times more than those younger households – so you can see that vast difference. Of course, when you’re younger, you may well be trying to get onto the housing ladder, or pay down student debt, and start your pension-saving journey. So, the idea of being wealthy... it’s not just a large sum of cash, it just seems a world away.

[3:50] Helen Morrissey: Absolutely – but, as you say, one of the game-changers is owning property, isn’t it? I mean, I think that makes up 40 per cent of people’s wealth, on average?

[3:59] Sarah Coles: Yes – and that’s one of the reasons why buying property is on people’s radar when they’re young. Obviously, there’s all that sort of thing about the difference between renting and buying and lifestyle – and, actually, just wanting to get on the property ladder as well. So, it is worth exploring all the help you can get when you’re younger – and one of the options that you do have is looking at whether the Lifetime ISA suits you, as long as you qualify for it.

[4:17] Helen Morrissey: But, of course, it’s not all about property, is it, Sarah? As you probably imagine – given that I’ve just [inaudible 4:22] the pension...

[4:23] Sarah Coles: [Laughs]

[4:23] Helen Morrissey: ...wealth is a key building block as well – and this makes up more than a third of people’s wealth, on average.

Now, what I’d like to say about pensions is that they are a long-term game and you do really have to be patient when you are building up your pensions. And it can feel... you know, particularly me – when I was younger as well – it can feel like you’re not really getting anywhere fast in those early years – but it is precisely this long-term drip feed of contributions, long-term investment growth that could see your retirement wealth growing in the future. So, you’re laying real firm foundations there.

And I think it can be off-putting for young people – you know, reading some of the big figures that are banded around in the press – and things like that – which put forward pension pots worth hundreds of thousands of pounds – and you’re new on your journey, and you’re thinking, ‘How is my £30,000 pot, for instance, gonna get me to where I need to be?’ – but what I would say is, you need time and you need patience.

[5:25] Sarah Coles: So, that’s gonna be very comforting for people who are at the beginning of their journey – but there will be people, who are a little bit later in life, who are also maybe falling a bit short of where they want to be – so have you got any advice for them?

[5:35] Helen Morrissey: Yeah – I mean, I am ever the optimist – as you know – and I genuinely think it’s never too late – to be honest, Sarah – to make a difference to your retirement.

If you’ve got some extra money to put into your pension, then that can make a huge difference – you know, boosting those contributions. So, the annual allowance means that most people can put up to £60,000 into their pension every year – and even making small steps, such as increasing your contribution every time you get a pay increase or a new job, can also give your pension a boost. But it is important to say that money in a pension isn’t usually accessible until the age of 55 – that’s going up to 57 in 2028 – so, obviously, you do need to make sure that, when you are boosting your contributions, you’ve still got enough money to keep you going in the short-term as well.

[6:22] Sarah Coles: So, we talk a lot about your contributions – but, of course, if you’re working and you’re employed, then there is a decent chance that you’re going to get a contribution from employer as well, isn’t there?

[6:30] Helen Morrissey: Yeah – and I think it’s really important to see what your employer can do for you.

So, many employers will continue to... statutory minimums under auto-enrolment – but there are employers that are willing to do more if you boost your contribution – so that’s what’s known as an ‘Employer match.’ And, if your employer does offer that, that can be a really powerful way of really boosting that contribution – without necessarily having to put in much more, yourself – so it’s well worth investigating, if you’ve got the extra cash.

[7:00] Sarah Coles: So, I think one of the other things that we always talk about when we’re looking into making the most of your pension is the fact that people actually might have pensions that they’ve forgotten about.

[7:07] Helen Morrissey: It’s a huge issue. So, research in the Pensions Policy Institute estimated that there’s 3.3 million pensions lost in the system. So, one of those pensions – or even more than one of those pensions – could have your name on it. And, you know, it’s easily done – you move jobs, you then move house – you don’t update your contact details – and, before you know it, you’ve lost the pension – but finding that pension could prove to be a big boost to your overall retirement resilience.

So, what I would say to people is... sit down, make a list of everywhere that you’ve worked, and then track your pensions paperwork to see if you’ve got paperwork for everywhere that you think that you’ve had a pension. If you think that there’s one missing, you can give the Pension Tracing Helpline a call – it’s a free government service – and see if they can help you.

[7:57] Sarah Coles: So, once people have got to that stage of tracking down their pensions, they might think, ‘Ay – oh, great, that job’s over – no more admin!’ – but there is one more step, isn’t there?

[8:05] Helen Morrissey: Yeah – so I think, once you’ve got those pensions together, it might make sense to consolidate them, just because you’re not having to manage them in all different places. Bring them together can save you time, admin, cost – but, as I say, before you take the plunge and do that, you need to make sure that it is in your right interests. So, you need to make sure that you aren’t incurring any expensive exit fees, for instance, by doing so. You also need to make sure that you’re not missing out on any important benefits – such as guaranteed annuity rates – that could really boost your income. ele

So, as long as you’re aware of that... what I would say is that, if you are able to consolidate your pensions, it can really actually improve your overall retirement decision-making because you will view one larger pension in a very different way to several small ones that you might be more tempted to maybe take down as cash and spend – so there’s lots of think of there.

[9:00] Sarah Coles: I guess part of this conversation... because we’re talking about total wealth, we’re talking about the pot – but that’s really just part of the consideration, isn’t it? – because people can look at the pot and think, ‘Ooh, I’m rich!’ – whatever it is that they’ve got in their pension. But there is also that step – isn’t there? – of working out what that actually means for you.

[9:15] Helen Morrissey: Yeah – it’s a really vital part of your retirement planning – ‘cause, as you say, you can look at your pensions and say, ‘Oh, I’ve got ‘X’ amount in my pension,’ but what does that mean for you in terms of your retirement income – can you survive on it?

So, what I would say is... you know, from time to time, take a look at what you’ve got – make use of online pension calculators that your pensions provider will offer – and that will usually give you a sense of what you’ve got, what that’s likely to give you in the time and if you keep contributing at that level. It can also enable you to model the impact of boosting your contributions – and I just think it’s a really powerful way of looking at it and saying, ‘Right, this is what I’m on track for – is that enough?’ – and it either gives you the confidence to say, ‘I do have enough’ – or it gives you the time to put a plan in place if you’re not.

[10:04] Sarah Coles: So, when we talk about this wealth picture... obviously, we’ve got the property side of things – we’ve got the pension side of things – but we’ve also got the saving and investing side of things. And I think, sometimes, when we talk about wealth – and then we start to talk about assets – and it sounds a lot like collecting money in order to be flash, and having loads of cash, and all the rest of it – but, actually, whilst, that way, it can mean lots of other things to people.

So, it’s not necessarily about building wealth for the sake of it – it’s about what it does for you. For some people, it can be security – for some people, it can be building for your plans for the future. So, it is worth... when you’re looking at your savings and investments, it’s worth – that sort of planning that you’re talking about – for that as well. So, it’s not just your long-term, ‘What do I want 40 years from now?’ – it’s actually looking at that term of maybe 20 years down the line... ‘What do I want there – how can I build towards it?’ – or even the short-term, ‘What are my savings going to be building towards for that as well?’

I think it’s easy to get sidetracked with one particular thing – and think, ‘I’ll just focus on this area and everything will be fine.’ It’s really important, I think, to have that broader pitch – you know, maybe put some money in a savings account, some in a Stocks and Shares ISA, some in a pension – and just make sure you’re building that round resilience rather than anything else.

[11:05] Helen Morrissey: Absolutely – it gives you that all-important flexibility, doesn’t it? – ‘cause, as you say, you could put all your money in a pension, but then you can’t access that until you’re in your mid-50s, for instance. So, as you say, building across the spectrum gives you that confidence that you can deal with all the challenges that life may throw at you.

[11:21] Sarah Coles: I would also say that – from speaking to people who are at various stages in this process – nobody’s perfect. I think we’re talking now about this great perfection that everyone should aim for – and, yes, absolutely, we should all be doing whatever we can – but also, don’t beat yourself up. To get to the point where you think, ‘Oh, my goodness, why have I not put more into my pension?’ – or, ‘Why is my savings safety net...?’ Doesn’t matter where you are right now – I would just say... just start again, look ahead, think about what you’re doing right now to build for the future – don’t necessarily worry about, ‘Am I wealthy?’ – ‘Am I wealthy enough?’ – ‘How am I doing compared to everyone else?’ It’s what you do now that makes all the difference.

[11:55] Helen Morrissey: Everything helps, doesn’t it – so, as you say, whatever you can do to help yourself is all-important.

But I think, now, we’ve got our stat of the week. This is gonna be one for you, this time – ‘cause it’s...

[12:05] Sarah Coles: Ooh!

[12:05] Helen Morrissey: ...gonna be very ‘Pensions-y!’

[12:06] Sarah Coles: [Laughs]

[12:07] Helen Morrissey: So, I mentioned the Pensions Policy Institute research earlier on – which estimated that there were 3.3 million lost pension pots estimated out there. So, my question to you, Sarah, is how much are those pots estimated to be worth? – and I’ve got three options here.

So, the first option is £21.1bn – the second is £31.1bn – and the third is £41.1bn. Which d’you think it is?

[12:38] Sarah Coles: Well, I think, whatever the figure actually is, all of those are massive figures. It really does show that a little bit of time spent tracking it down is definitely worth it. But I think.... I just... We keep going down the middle – it’s not working – so I’m going with the lowest one... I’m going for £21.1bn.

[12:52] Helen Morrissey: Ah, okay – well, you should have gone for the middle!

[12:55] Sarah Coles: [Laughs]

[12:56] Helen Morrissey: It is actually £31.1bn – which, as you say, they’re all enormous sums, but it’s genuinely an enormous sum. Think I’ll definitely check in this weekend to see...

[13:06] Sarah Coles: [Laughs]

[13:06] Helen Morrissey: ...if I have lost any pension pots along the way, myself!

[13:09] Sarah Coles: It makes a change from checking down the back of the sofa for coins – you know, you’re just checking down the back of your old employment records for a thousand pounds that might be lurking there!

[13:16] Helen Morrissey: Indeed.

[13:17] Sarah Coles: [Laughs] Well, that’s all from us this week – but, before we go, we should say this was recorded on 17^th October 2025, and all information was correct at the time of recording.

[13:25] Helen Morrissey: Nothing in this podcast is personal advice – you should seek advice if you’re not sure what’s right for you.

[13:31] Sarah Coles: All investments fall as well as rise in value, so you could get back less than you invest.

[13:35] Helen Morrissey: So, all that’s left is for us to thank our Producer, Elizabeth Hotson.

[13:38] Sarah Coles: And, of course, to thank you very much for listening – we’ll be back again soon. Goodbye!

[13:42] Helen Morrissey: Goodbye!