OLDER PEOPLE

The distribution of wealth among households is closely associated with age. In 2005-06, average household net worth peaked in the 55-64 year age group at around $824,000 and then decreased for those aged 65-74 years ($743,000) and 75 years and over ($575,000). This partly reflects the common pattern of people gradually accumulating wealth throughout their working life and drawing upon this wealth in retirement. While nearly three-fifths (59%) of people aged 55-64 were employed, this declined for those aged 65-74 years (17%) and those aged 75 years and over (5%). While mean household net worth was generally lower in 2003-04, the pattern of distribution across the age groups was the same.

The age of household members is also reflected in the composition of household wealth. In 2005-06, the average value of shares and trusts in older households (where the reference person was aged 65 years and over) was higher than in younger households ($39,000 and $12,000 compared with $7,000 and $3,000). Older households had less wealth in their superannuation funds and more in the values of their accounts held in financial institutions. The latter may reflect retirees receiving a lump sum payment from their superannuation funds and depositing it in financial institutions. Total liabilities tended to be lower in older households as they are more likely to have paid off most debts, especially those relating to mortgages.