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The paper is authored by James Lloyd of ILC-UK. The paper focuses on wide range of challenges to public policy relating to changing patterns in asset accumulation, including: long-term care funding; intergenerational solidarity; the debt burden on the young; equity release; means-testing of older people; the implications of rising property prices for retirement income.

The paper argues that that significant changes to patterns of asset accumulation across the life course have occurred. For instance, younger cohorts have benefited from rising real incomes. However, where these increasing incomes are used to obtain and pay off increasingly large mortgages, it is debatable as to who is actually receiving the benefit of these increases; the housing market enables others to capture the benefit. Yet, given the static real incomes of older cohorts, it is not clear who really benefits from rising property prices, aside from the small minority owning two or more properties. Today’s younger cohorts, forced to skew their retirement saving toward property, may find themselves in the same position as today’s older cohorts, with large volumes of illiquid wealth that are failing to contribute to any extra income in retirement.

ILC-UK is extremely grateful to its partners Prudential and Partnership supporting the analysis underlying this paper, and to the National Centre for Social Research for undertaking the statistical analysis.

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