Average age of death

Terron

NedS said:

Ibrahim5 said:

I don't have any property investments just my main home. If you spend £25K a year people don't really equate that to the 'millionaire' lifestyle.

It equates perfectly to me. Say your house is worth around £400k and you have a pension pot of around £600k (making you a millionaire), and you draw 4% income, you have £24k per year, before tax, to spend. If you are lucky, that £600k is evenly split with your spouse and you can draw your income over two tax allowances and avoid paying any income tax.

Perhaps you were confusing millionaire with billionaire

A decamillionaire (£10million) would do. £240k per year before tax could allow you to live very nicely.

SouthCoastBoy

I think the idea of a million pounds wealth for a household being a lot of money is history. 

CETV on final salaries illustrate this point. A couple in receipt of £13k pa final salary pension each and owners of a 3 bed detached house would most probably give them millionaire status although I doubt in the eyes of the majority they would be seen as "loaded". 

handful

SouthCoastBoy said:

I think the idea of a million pounds wealth for a household being a lot of money is history. 

CETV on final salaries illustrate this point. A couple in receipt of £13k pa final salary pension each and owners of a 3 bed detached house would most probably give them millionaire status although I doubt in the eyes of the majority they would be seen as "loaded". 

Agreed. I probably just about scrape into the bracket of millionaire (jointly with the OH) if our property and every penny is taken into account and certainly we don't consider ourselves as loaded! In fact, still quite a few years from retiring (59 currently like the OP) I suppose it's all relative and there are some who would think we are and many others who would think we are just scraping by!

Linton

SouthCoastBoy said:

I think the idea of a million pounds wealth for a household being a lot of money is history. 

CETV on final salaries illustrate this point. A couple in receipt of £13k pa final salary pension each and owners of a 3 bed detached house would most probably give them millionaire status although I doubt in the eyes of the majority they would be seen as "loaded". 

See https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/totalwealthingreatbritain/april2016tomarch2018#total-household-wealth-by-age-of-household-reference-person-hrp

31% of households in the 55-64 age range were valued at £1M+.  The figure includes property and pensions, not including state pension.  In the 65+ age range it was 22%.

Ibrahim5

I wonder if it includes DB pensions? If so how do you calculate that?

hugheskevi

Ibrahim5 said:

I wonder if it includes DB pensions? If so how do you calculate that?

It does.

The methodology is set out at this page. Essentially, it calculates the cost of providing the DB benefit via annuity at normal pension age, then discounts that back to a present day capital value, based on the rate of return of AA corporate bonds.

However, there were some significant methodological flaws, in particular:

An important element of the calculation was the age at which pension income started being paid (‘retirement age’). Ideally the normal pension age of the DB pension scheme to which the interviewee belonged should have been used for ‘retirement age’.

Unfortunately, this information was not collected (questions on normal pension age will be asked as from Wave 4 onwards). Nevertheless, information on the earliest age at which a current member could retire and take a pension was collected, and this was used as a substitute.

In a number of cases in both waves, the earliest retirement age reported by an interviewee was lower than their current age. In such cases the earliest retirement age was amended to be equal to the person’s current age in order to avoid negative discounting in the model.

If the didn't collect Normal Pension age, I'm sure they didn't collect actuarial deduction rates, so I think this meant they assumed Normal Pension age=Minimum Pension age in the early waves.

In any event, using indexed linked annuity rates to calculate DB scheme value overestimates the value, due to the significantly lower expected return of capital (c75%) associated with index-linked annuities.

Using bond yields to value the pension makes the results extremely volatile between waves as small changes in the discount rate have significant impact on the capital value despite the value to the member being unchanged. The very low bond yields of the last decade have meant very high capital values being calculated (effectively assuming extremely low returns for all future years followed by purchase of a very expensive annuity, so the capital value needed is very high due to near-absence of returns).

Presumably from wave 4 the NPA issue has been addressed, but even so you need to take the DB values with a couple of grains of salt given the use of annuity rates and bond yields in the calculation lead to very high capital values being calculated.

SomeMadeUpName

Erm....

What happen to the millionaires in their late twenties early thirties?  Do they all spank it all before they're 24 then spend the rest of their lives trying to build it back up?

  

NedS

SomeMadeUpName said:

Erm....

What happen to the millionaires in their late twenties early thirties?  Do they all spank it all before they're 24 then spend the rest of their lives trying to build it back up?

  

They've probably spent it on Lamborghini's and trips to Dubai which aren't included in the calculation of wealth