The well-off find it easier to accumulate more wealth

Researchers funded by the Joseph Rowntree Foundation discovered that the richer people were, the more they knew about the advantages of tax-free savings such as Tessas, Peps, and Isas.

The top 10% of the UK population own half the nation's wealth.

But the richest households were those just before retirement, where accumulated pension and housing wealth is at a peak, and outgoings, especially for childcare, have declined.

The researchers found that four factors affected wealth accumulation:

• Ability: the availability of spare cash, resulting from higher incomes and low outgoings. Couples with children, for example, generally reduce their savings.

• Attitudes towards savings, positive or negative

• Knowledge about savings and investment schemes, with middle-class savers the most well-informed

• Availability of suitable schemes, for example occupational pensions

Few people understood how the tax system treated different forms of assets, and there was considerable resistance to putting savings into 'inaccessible' vehicles like Tessas and Peps.

Although most people thought they were not putting enough money aside for a pension, they felt they either could not afford it or had left their contributions until too late.

"Our findings underline the need for policies that will enable people on low incomes to save and improve their pension entitlement," said Karen Rowlingson of the University of Derby, co-author of the report.

She was concerned that the lack of compulsion in government proposals for stakeholder pensions would make it less likely that people would save the sort of sums that could provide them with a reasonable income in retirement.

Life-cycle effects

The average household in Britain has £53,000 in assets, including pension rights, home ownership, and accumulated financial assets.

Single parents have the least wealth

But, perhaps surprisingly, only 17% is made up of financial wealth, such as bank accounts or shares.

One-third of families had no financial savings at all.

The largest portion of wealth - 35% - is held in the form of housing.

Pension entitlement is split between the future entitlement to an occupational or personal pension, which makes up 22% of total wealth and the right to a state pension, which is currently one-quarter of all wealth.

Wealth increases with both age and income, with the 60 to 69-year-old group owning the most wealth, an average of £133,000.

People with incomes of under £5,000 per year, on the other hand, had net wealth of only £3,000, while those with incomes of over £35,000 had average wealth of £110,000.

Young, single people, and lone-parent families had the least wealth.