Savings-age profiles in the UK

We used UK Family Expenditure Surveys to analyse the relationship between savings and age structure. We address two key problems: the sample selection bias when data refer to households and not individuals, and the treatment of pension income when drawing inferences from individuals' savings-age profiles about the relationship between an economy's savings and age structure. Our principal findings are that household data exaggerate savings rates of young adults and the elderly whilst underestimating those of 45- to 60-year-olds, and individual saving rates follow more closely the 'hump shape' of the life-cycle model, although the savings rates of the elderly remain positive for some ages.