Elderly people get richer

According to new figures from “Statistics Norway 2010”, the households of elderly people had assets of NOK 2.6 million on average. In 2020. This had increased to NOK 4.8 million, according to new figures from “Statistics Norway”.

 

The transition to old-age pension means that income will decrease for the vast majority. Despite this, older Norwegians are now on average so well off that they can continue to build up their wealth also as pensioners.

Money in housing and shares Older people generally have far higher assets than younger people. But a lot depends on whether an elderly person owns their own home or not. The market value of the elderly's homes increased on average by 41 per cent from 2010 to 2020. The elderly's financial capital has increased even more. Measured in what is known as current kroner, it has doubled on average from 2010 to 2020.

 

Increased housing value

Housing assets and financial assets Increased housing values have contributed a lot to Norwegians' general increase in wealth in recent years. The average value of a home in Norway is now around NOK 4 million. Well over half of Norwegians' wealth is in the form of housing. When we talk about wealth, many people still think primarily of money in the bank and money invested in mutual funds and shares. Shares have also increased a lot in value in recent decades.

 

Unequally distributed

And wealth like this is very unequally distributed in the population. People's housing wealth is more evenly distributed. Wealth increases a lot with age It is called real capital if you own a home. Financial capital is money in the bank or money in shares. Together, this is called wealth. Statistics Norway researchers Jon Epland and Mads Ivar Kirkeberg established in an Statistics Norway study from a few years ago that Norwegians' wealth increases a lot with age. It was not surprising. But until this study came along, it had been difficult to determine with relative certainty what people's homes were actually worth.

 

Real value

The real value of homes is indeed far higher than the assessed value known to the tax authorities. And most of Norwegians' wealth is, as mentioned, in their homes. This also made it clearer that many Norwegian households with low incomes – primarily the elderly – are sitting on significant assets. When the researchers take people's real wealth into account, they find that significantly fewer Norwegians than previously thought are exposed to the risk of poverty. The average value of a home in Norway is around NOK 4 million. Well over half of Norwegians' wealth is now in the form of housing.

 

From working to retired

The income of the elderly is mostly significantly reduced when they go from being employed to becoming pensioners. A study by Aurora Hattrem in Statistics Norway from 2022 nevertheless shows that the elderly do not begin to eat away at their wealth after they have reached the age of 67. Despite the fact that their income goes down a good deal. Even after the transition to old-age pensions, it seems that there is a significant wealth build-up among older Norwegians, concludes the Norwegian Statistical Institute researcher. Those with the lowest income increased the most In his study, Hattrem looked at a total of just over 44,000 Norwegians born in 1944. She found that in the last decade it was especially those with the lowest incomes who increased their wealth. On average, they increased their wealth far more than those with the highest incomes. This was mainly due to the strong increase in the value of their real capital, i.e. housing. Norwegians born in 1944 have an average fortune of NOK 3 million, Hattrem found out. By comparison, the average wealth of the entire adult population is NOK 1.2 million.

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References: Tor Morten Normann: "Increased wealth and housing wealth among the elderly",

Statistics Norway article, 6 December 2022

Jon Epland and Mads Ivar Kirkeberg: "Wealth Distribution in Norway", Statistics Norway report 35/2012.

Aurora Hattrem: "Less income, but greater wealth for pensioners", Statistics Norway article, 10 January 2022