Retired people are more likely to hand down their wealth than spend it
Most wealth held by retired people is likely to be bequeathed to future generations rather than spent, research has found.
But younger generations may not actually see their inheritance until they are older themselves - because people often pass their wealth to their surviving spouse before it filters down.
The study, which focused on England, found the bulk of retirees' wealth tends to stay intact - implying most of it will eventually be bequeathed to later generations.
In England, those approaching retirement aged 55 to 64 hold £185,000 in housing wealth and around £33,000 in other wealth excluding pensions, according to the research funded by the Institute For Fiscal Studies (IFS), Retirement Savings Consortium and the Economic and Social Research Council.
It found 80% of over-50s are home owners. It said based on current trends, the majority of home owners at age 50 would not be expected to move before they die.
Meanwhile, around one in six of 55 to 64-year-olds own a second home. Researchers found the prevalence of second home ownership changes very little at age 70 and over, and increases slightly among those in their late 50s and 60s.
Financial wealth tends to be drawn down slowly, with the research suggesting that on average people will draw down just 31% of net financial wealth between the ages of 70 and 90.
The research also looked at patterns of bequest giving.
It found that married people nearly always bequeath only to their spouse. And the surviving spouse most often bequeaths all of their assets to their children rather than sharing directly across multiple generations.
This implies that inheritances will typically only be received at relatively older ages.
For example, someone currently aged 40 who was born to a 27-year-old mother and an older father might, on average, expect to receive a bequest from their parents at the age of 63.
The research also said existing patterns might change in the future - for example if future retirees have lower pensions to live on than current pensioners, drawing larger sums from housing wealth may become more widespread.
Rowena Crawford, an associate director at IFS and author of a set of reports based on the research, said: "Older people do not draw on their wealth much during retirement.
"The majority of home owners do not move or access their housing wealth, and even financial wealth is drawn down only slowly.
"This means that most wealth held by retired people is likely to be bequeathed to future generations, rather than spent.
"This will have implications for the level and distribution of resources among current working age individuals, particularly those with wealthy parents and few siblings.
"Given the increased freedom people now have over how they spend their pension wealth in retirement, carefully monitoring how the use of wealth evolves in future will be important, both for the living standards of the retirees themselves, and also for younger generations."
Sir Steve Webb, a former pensions minister who is now director of policy at Royal London, said: "This report confirms that the vast majority of pensioners who have saved through their working life are cautious with their money and leave unspent wealth at the end of their lives.
"This is great news for those who believe in pension freedoms.
"The IFS research suggests that the biggest concern about pension freedoms is likely to be about excessively cautious retirees spending too slowly than it is about reckless retirees blowing their pension savings on lavish living."