More evidence of increasing wealth gap

ukcarper

ruperts wrote: »

First generation in modern British history where wealth has fallen.

It also shows that a 30 year old now has an income of almost twice that of a 30 year old who was born in 1950s.

CLAPTON

ruperts wrote: »

First generation in modern British history where wealth has fallen.

it seems to be a graph showing INCOME and not wealth.

mrginge

ruperts wrote: »

If recent reports about more than half of people not having more than £100 savings are to be believed then I'd consider the idea that a significant proportion of people are getting wedding gifts of hundreds of thousands of pounds somewhat unlikely.

Lets just think about that 200bn of annual wealth distribution.
There are 530k or so deaths a year.
Lets assume a large proportion of those deaths result in some wealth distribution - maybe 500k
What does that make the average inheritance given per year?
Is that a sensible number to apply across the population?
Of course if we had an equal distribution of wealth then it might make sense. But we don't.

Cells has forgotten that wealth is not distributed equally thoughout the population, with 50% of the population owning 10% of the wealth and 10% of the population owning 50%.

This is of course just a minor inconvenience to cells since it is much more important to use the empirical evidence of the three or four people who handed down 100k+ gifts rather than think about the millions who don't live in that world.

Ah but what about all those extra gifts that cells likes to mention?
Well they are just advance inheritance. By all means count that in the current year, but also understand that all you've done is reduced it out of the pot that gets inherited when that person actually dies.
It's a standard fudge. Bringing forward already declared spending/income/inheritance doesn't mean more spending/income/inheritance. Just ask the NHS.

cells

mrginge wrote: »

Lets just think about that 200bn of annual wealth distribution.
There are 530k or so deaths a year.
Lets assume a large proportion of those deaths result in some wealth distribution - maybe 500k
What does that make the average inheritance given per year?
Is that a sensible number to apply across the population?
Of course if we had an equal distribution of wealth then it might make sense. But we don't.

Cells has forgotten that wealth is not distributed equally thoughout the population, with 50% of the population owning 10% of the wealth and 10% of the population owning 50%.

This is of course just a minor inconvenience to cells since it is much more important to use the empirical evidence of the three or four people who handed down 100k+ gifts rather than think about the millions who don't live in that world.

Ah but what about all those extra gifts that cells likes to mention?
Well they are just advance inheritance. By all means count that in the current year, but also understand that all you've done is reduced it out of the pot that gets inherited when that person actually dies.
It's a standard fudge. Bringing forward already declared spending/income/inheritance doesn't mean more spending/income/inheritance. Just ask the NHS.

There is a good document on UK inheritance stats go google it and have a look its a few years out of date now just going off memory I think its for 2013 inheritances so they will be a good deal higher now (with the stock and bonds and house prices higher than three years ago)

Anyway going off memory and roughly speaking the figure was £72 billion for just inheritances or likely closer to £100 billion now. Gifts I reckon are on par with inheritances so about £200B a year overall.

We can look at the total wealth of the UK which is circa £10 trillion to see if the two fit. £200 billion is 1/40th of £10 trillion which is a good tally as it suggests people hold onto wealth about 40 years before passing the last of it on.


Anyway first and most importantly we all need to accept inheritances/gifts play some role in housing and general wealth. It's total folly to ignore it.

So the question then becomes how widespread are inheritances and gifts. Is it like I suggest quite common or is it like you seem to be suggesting where a few people take the lions share and 90% get nothing.


Well look at that document of UK inheritance stats. It shows things are widely spread out. Sure maybe half the population doesn't get (I don't remember exactly I'm just on my phone so can't check right now) but half do and half the population is significant. More importantly people get married so if only half get and half done when you look at households that would jump to 75% at least getting one inheritance.

I will post the link to the inheritance stats when I get home I I remember

System

cells wrote: »

More importantly people get married so if only half get and half done when you look at households that would jump to 75% at least getting one inheritance.

You mean rich people look around for someone poor to marry in order to make things fairer?

Sapphire

I think the worst thing of all – as touched on in another post – is the apathy there appears to be among many (though not all) people in their twenties and thirties. In my family, and friends' families as well, there are people who don't seem to aspire to anything (including owning homes), despite having had 'uni' educations. They appear perfectly content living with their parents. One I know has even made calculations as to how much he will inherit when his mother dies – and he lives at his parents' place even though his father, an extremely valuable and hardworking man, bought him a flat after selling his company before he died.

It's not good. Unfortunately, such lifestyles encourage emotional problems of various kinds, as well as physical ones (gaining weight). Perhaps there is some lack in British people's education and in prompting individuals to aspire and be productive (and perhaps that's why many continental Europeans, who have far less, do so well here)? Work actually makes you feel alive and as though you are doing something useful, even if it's a 'basic' job such as some of the ones I started off with (working in shops and in very 'mundane' clerical roles)? Or perhaps drive often comes to people who have to work for a living in order to survive?

I believe that attaining work is going to be ever harder in the future in any case, due to automation, as well as to globalisation (unless the latter trend changes)…

Mortgagefreeman

cells wrote: »

I'm not sure limiting it to 30 is a good idea I would limit it to newly married to take into account that people seem to be getting married later.

The last three people to get married in their late 20s I know of all receives substantial gifts. One a whole house no mortgage and the other two in the region of £100-150k which they used as deposits to buy homes. Of course this will not apply to everyone but it does apply to a significant proportion. I also know a landlord who is in his 70s and will likely gift each of his grand children an unencumbered house this decade and he has quire a few >10 grandchildren

As I said before I would look at what people in their 40s have today vs people in their 30s had a generation ago. The difference due to starting life later (starting working age 15 rather than 22 and life expectancy up nearly a decade). Overall the country certainly has much more wealth than a generation ago and that wealth does get passes down.

If anything this discussion is really about timing of gifts and inheritances not about wages or house prices. In the past people got those about a decade sooner which probably accounts for most possibly all the differences you may note in a certain age group

What utter nonsense. I may as well say there's a bloke down the end of my road handing out twenty pound notes. :rotfl:

cells

ruperts wrote: »

First generation in modern British history where wealth has fallen.

the graph is clearly some sods poor representation of poor data. look at the end of the orange line its higher than the end of the purple line which means that 30 year olds right now are supposedly earning more than 40 year olds which is of course BS but if you want to

cells

Clifford_Pope wrote: »

You mean rich people look around for someone poor to marry in order to make things fairer?

no I think its quite random but if you take 10% to be very wealthy then there is a 90% chance they will marry outside of the very wealthy. Obviously this does not always apply some rich folk try quite hard and suceed in pairing with other rich persons but its very common for better off people to find they get with middle and poor people. Ive seen this quite often

cells

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/541725/IHTNationalStatisticsCommentary.pdf

UK inheritance statistics 2013/14

£288,000 was the average net value of estates that required grant of representation. 267,549 estates issued a grant of representation

So each year about 267,000 people leave an estate of which the average value is £288,000

That is no small number. Over a Generation (30 years) that works out to over 8 million such estates. So each generation >8 million significant estates are passed down. Bear in mind most estates will gift to more than one person eg parents leaving an estate to their two kids so you are looking at multiple times this 8 million estates being received. That turns to at least 16-20 million individuals who benefit from significant estates each generation. And unless this individual is a single person and has no family then even more people benefit. As I keep saying its a very broad very significant economic consideration that most people simply do not think about and take into consideration