Retirement Savings in the US and England: How Important is Housing?

Published: 2015
Project ID: UM15-15


In this paper, the first analysis of its kind, we use comparable data from the US and England to examine similarities and differences in the level and trajectories of income and assets among households aged 70 and over. This allows us to shed light on the role of institutional differences between the two countries in explaining observed behavior. In the US, older households decumulate their wealth slowly during their retirement, with out-of-pocket medical expenses, uncertain life expectancy, and bequest motives potentially shaping the patterns. In England, older households actually accumulate wealth, in particular housing wealth, during their retirement, thus resulting in increasing wealth profiles over the retirement period. This tendency was particularly salient in the early 2000s, a time when house prices increased rapidly in England.