Submitted October 2012.
Financial Crisis Wealth Losses and Responses among Older Households in England*
Article first published online: 12 JUN 2013
© 2013 The Authors Fiscal Studies © 2013 Institute for Fiscal Studies
Special Issue: Special Issue on the Microeconomic Consequences of the Great Recession
Volume 34, Issue 2, pages 231–254, June 2013
How to Cite
Banks, J., Crawford, R., Crossley, T. F. and Emmerson, C. (2013), Financial Crisis Wealth Losses and Responses among Older Households in England. Fiscal Studies, 34: 231–254. doi: 10.1111/j.1475-5890.2013.12004.x
This research was made possible by Economic and Social Research Council (ESRC) grant number RES 000-224-323 and the IFS Retirement Saving Consortium which comprises Age UK, Association of British Insurers, Department for Work and Pensions, Financial Services Authority, HM Treasury, Investment Management Association, Money Advice Service, National Association of Pension Funds, Partnership Pensions and the Pensions Corporation. Cofunding was also received from the ESRC-funded Centre for Microeconomic Analysis of Public Policy (CPP, reference RES-544-28-0001) at the Institute for Fiscal Studies. The English Longitudinal Study of Ageing (ELSA) data are made available through the UK Data Archive (UKDA). ELSA was developed by a team of researchers based at the National Centre for Social Research, University College London and the Institute for Fiscal Studies. The data were collected by the National Centre for Social Research. The funding is provided by the National Institute of Aging in the United States, and a consortium of UK government departments coordinated by the Office for National Statistics. The developers and funders of ELSA and UKDA do not bear any responsibility for the analysis or interpretations presented here. All errors are the authors' own.
- Issue published online: 12 JUN 2013
- Article first published online: 12 JUN 2013
- financial crisis;
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.