Couples who have retired in the last decade have far more money than they need to maintain their standard of living through their lives, according to a report examining financial preparedness.
The Institute for Fiscal Studies has devised a way to calculate how much wealth couples need to accumulate in order to have sufficient funds in retirement.
Their findings revealed that 92% of couples born in the 1940s had accumulated more wealth than the model suggested they need to maintain their standard of living into and through retirement.
It based its findings on two approaches: a comparison of the wealth holdings and estimated retirement income of couples between the ages of 20 and 50 with their average earnings; and an economic model of behaviour over the life cycle to estimate how much wealth they would need.
'The surpluses are substantial on average - the median surplus being over £220,000, which would be enough to produce around £7,000 a year of income if used to buy an index-linked annuity,' its Retirement sorted? The adequacy and optimality of wealth among the near-retired report stated.
'The surpluses are larger for those with higher average lifetime earnings than for those with lower lifetime earnings, and for those who live in London than for those who live elsewhere in England.'
It also estimated that 80% of couples born during that era had an annual gross pension income at age 65 that replaced at least two-thirds of their annual working-life earnings.
Taking into account the income that could be generated from other financial wealth, 60% of couples would have greater income in retirement than their average real earnings during working life, the IFS found.
Additionally, housing wealth increased the proportion of people able to replace more than two-thirds of their working-age earnings in retirement to 98%.
Cormac O'Dea, a senior research economist at the IFS, said: 'The large majority of couples reaching state pension age in recent years have more wealth than necessary to maintain their standards of living in retirement.
'This is a cohort that has, as it has turned out, ended up saving more than they needed for retirement. The picture for future generations, however, may look quite different.'
