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what is the average net worth of uk individual/family
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# 1
ajbell
Old 26-07-2009, 6:58 PM
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Default what is the average net worth of uk individual/family

As title. what is the average net worth of uk individual/family.
Assets/cash minus debts.
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# 2
shop-to-drop
Old 26-07-2009, 7:01 PM
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I think the variables would be enormous and so average figures wouldn't really mean a lot as it doesn't only depend on income but spending and investments. I wonder what everyone else will think?
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# 3
matthew74
Old 26-07-2009, 7:02 PM
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Not far off zero I would imagine.
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# 4
EdInvestor
Old 26-07-2009, 8:17 PM
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Originally Posted by matthew74 View Post
Not far off zero I would imagine.

Wrong, it's 200,000 Euros per head, the highest of the countries examined in this survey.

http://www.group-economics.allianz.c...svermoegen.pdf

The main contributors are housing wealth and pensions (of which we have a lot more than people in other countries.)
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# 5
ed123
Old 26-07-2009, 8:30 PM
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..............5p
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# 6
DiggerUK
Old 26-07-2009, 8:38 PM
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Originally Posted by EdInvestor View Post
Wrong, it's 200,000 Euros per head, the highest of the countries examined in this survey.
Just one problem Ed, these calculations were done in 2006.
Which counts as "Before Northern Rock" (BNC), values of property, pensions and investments are a lot lower now.

I think the answer we have so far is somewhere between zero and 200,000 Euros.
Anybody got more up to date figures, it would be quite an insight to see what the difference is now.
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# 7
EdInvestor
Old 26-07-2009, 9:39 PM
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Originally Posted by DiggerUK View Post
Just one problem Ed, these calculations were done in 2006.
Which counts as "Before Northern Rock" (BNC), values of property, pensions and investments are a lot lower now.
On the other hand there are three years' additional payments off mortgages and into pensions that would be counted. Property is down around 15-20% and other investments probably around 20-25%. Very hard to do a calculation with pensions as the current value of the fund won't affect the eventual payment with final salary pensions (the majority) anyway. Cash savings are likely to have gone up a lot as a percentage of the total.

Shall we say around 150,000 Euros per head?

The comparative position with other countries should be much the same as everyone has been affected by the credit crunch - though the exchange rate may be a factor.
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# 8
DiggerUK
Old 26-07-2009, 9:48 PM
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Quote:
Originally Posted by EdInvestor View Post
Shall we say around 150,000 Euros per head?
I knew we were above average in our house, now I find we are way beyond all Europeans.

Is that down to the gold or the magic beans?
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# 9
project500
Old 26-07-2009, 9:53 PM
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I dont believe it ,I think there is a lot more debt about than is portrayed in these figures
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# 10
Bogof_Babe
Old 26-07-2009, 9:56 PM
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How can you classify pensions as wealth? Aren't we always being reminded that today's pension contributors are paying for today's pensioners, and we don't actually own the money we have accrued in "our pot".

Wasn't this the crux of the matter when Allied Wire & Steel (think that's the name) employees lost their pensions? There was outcry because they saw it as their money (rightly as they had paid it in) but it was not deemed "theirs" when it came to drawing down the money in retirement.

Apologies for any perceived stupidity in this post - I freely acknowledge that I don't know much about these things.
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# 11
Aegis
Old 26-07-2009, 10:00 PM
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Quote:
Originally Posted by Bogof_Babe View Post
How can you classify pensions as wealth? Aren't we always being reminded that today's pension contributors are paying for today's pensioners, and we don't actually own the money we have accrued in "our pot".
You're thinking of state pensions. State pensions are paid for as required from national insurance contributions. Anything we put into our own pension pots is ours. Final salary schemes become a little tricky because the company effectively has to stay in business to keep paying their retired employees if there is a deficit. Defined contribution schemes are much more straightforward.
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# 12
td_007
Old 26-07-2009, 10:02 PM
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Quote:
Originally Posted by EdInvestor View Post
Shall we say around 150,000 Euros per head?
There is inherent fallacy in considering the value of the house one lives in net assets category - as it will only be available if one sells it which means no roof over the head! Hence, even if the number of house owners might be higher in the UK, one has to first of all subtract the outstanding mortgage and if the house is owned outright, then consider only the difference between the value of the present house versus to one they could potentially buy (down-size) as net asset.

Over a trillion pounds debt and Eur 150K per head just do not seem to jive....
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EdInvestor
Old 26-07-2009, 10:06 PM
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I dont believe it ,I think there is a lot more debt about than is portrayed in these figures
Don't forget that 40% of owner occupied property is owned outright with no mortgage.

IMHO people also don't realise that the levels of prosperity in the Uk have been steadily rising for around 15 years now.Don't forget there was a long period pre credit crunch when the economy was stable, with rising employment and wages, low inflation and interest rates and low basic costs (eg food, gas and elec).

Then there was the massive crash in the prices of consumer goods caused by the China effect. The price of everything from computers and DVDs to home wares to clothes and shoes has plummeted. The advent of stores like Primark means that even someone on benefits can afford a couple of new fashion items a week.

People notice that there are a lot more items like plasma TVs and smart cars around and think it's all based on debt.But disposable income has been quite high for years and when prices crashed, such goods became affordable to many people.

Add to that the fact that most families have two incomes and that young people are much better educated so can get better jobs and earn more, and it's not hard to see why we are at or near the top of the European wealth list
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# 14
Aegis
Old 26-07-2009, 10:07 PM
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Quote:
Originally Posted by td_007 View Post
There is inherent fallacy in considering the value of the house one lives in net assets category - as it will only be available if one sells it which means no roof over the head! Hence, even if the number of house owners might be higher in the UK, one has to first of all subtract the outstanding mortgage and if the house is owned outright, then consider only the difference between the value of the present house versus to one they could potentially buy (down-size) as net asset.

Over a trillion pounds debt and Eur 150K per head just do not seem to jive....
A house isn't great to use as liquid personal wealth for the reasons that you've identified, but it definitely counts as an asset. Even on a company's balance sheet the buildings would count as assets, just not short-term ones.
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# 15
Bogof_Babe
Old 26-07-2009, 10:08 PM
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Quote:
Originally Posted by Aegis View Post
You're thinking of state pensions. State pensions are paid for as required from national insurance contributions. Anything we put into our own pension pots is ours. Final salary schemes become a little tricky because the company effectively has to stay in business to keep paying their retired employees if there is a deficit. Defined contribution schemes are much more straightforward.
I actually meant final salary schemes (such as I have, albeit frozen until I reach 65). If it goes into deficit due to the longevity of current pensioners, there's no guarantee there will be anything left when my turn comes. If current employees all boycotted the scheme (assuming it was still open to new members) the money would soon run out.

Point taken about defined contribution pensions though. They "have your name on it" presumably. Then it's only the skill of those investing your money that determines how much you get at retirement, so although you might have a decent sized fund, the return is still an unknown isn't it?
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# 16
gozomark
Old 26-07-2009, 10:09 PM
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what about the per capita amount of UK state debt....
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EdInvestor
Old 26-07-2009, 10:12 PM
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Quote:
Originally Posted by Bogof_Babe View Post
I actually meant final salary schemes (such as I have, albeit frozen until I reach 65). If it goes into deficit due to the longevity of current pensioners, there's no guarantee there will be anything left when my turn comes.
There is now, via the Pension Protection Fund.

However you cut it, non state retirement savings are always seen as part of household assets, as is property.

You can always purchase housing services by renting.If you sell your property and invest the money and use the interest to pay the rent, you still have that capital.
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# 18
gozomark
Old 26-07-2009, 10:17 PM
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but who provides the guarantee on the Pension Protection Fund ? Other UK citizens
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# 19
td_007
Old 26-07-2009, 10:28 PM
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Originally Posted by EdInvestor View Post
IMHO people also don't realise that the levels of prosperity in the Uk have been steadily rising for around 15 years now.Don't forget there was a long period pre credit crunch when the economy was stable, with rising employment and wages, low inflation and interest rates and low basic costs (eg food, gas and elec).
It is not really clear how much of it was "real" rise and how much of it was fueled by the credit bubble which finally burst. The reality is people could afford to buy houses and too big ones which could not actually afford because of easy credit, they could splurge in shopping because of easy credit, spend big on holidays because of easy credit. Now when credit has become tight you see the number of repossessions rising, retail spend at its lowest ever, holidays cut down drastically.

Really one should be asking how much "disposable" assets do people have - hard cash saved and what can be sold off without cutting back their present quality of life.
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# 20
EdInvestor
Old 26-07-2009, 10:34 PM
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Originally Posted by td_007 View Post
It is not really clear how much of it was "real" rise and how much of it was fueled by the credit bubble which finally burst.
It is actually clear.The figures quoted in the survey and in the Govt's household wealth survey are net of debt.There simply wasn't as much debt as you think in comparison with the value of the assets.

Repos so far are less than 1% of total mortgages - if people were in real trouble you'd expect a far higher percentage than that.

I think quite a few people think the spending had got a bit unbalanced - it was leading to quite a lot of waste for a start - so some people have taken steps to moderate this - eg by paying down debt/mortgages voluntarily while interst rates are so low..But most of them are not forced to do this, they just think it's sensible especially while savings rates are so poor.

Last edited by EdInvestor; 26-07-2009 at 10:37 PM.
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