savings gap, household and national savings, capital accumulation, bequests and transfer

The UK Savings Gap

We set out a framework for measuring the adequacy of saving in the United Kingdom by assessing the absolute level of savings based on individual preferences of different ages. We examine this relationship between age and savings using data from the United Kingdom Expenditure and Food Survey 2004-5. We show that while the level of national saving is about 8.4 percentage points of net national income lower than is required if one assumes that each cohort pays its own way, wealth holdings are considerably higher than are required on the same basis.