Where do Wealthy people keep their money ?

OldScientist

Albermarle said:

Millyonare said:

Grumpy_chap said:

Millyonare said:

Anyone with a private or public pension pot of £1m+ is in the top 3% of all UK adults. One is in a better position than 99% of all people on the planet. It is a very gilded position. 

That is very probably a meaningless statistic.  Both considered at the UK level or the global level.
It is not the "very gilded position" that you suggest - it would facilitate around £40k to £50 of annual income from retirement which is nice but by no means exceptional income level to have or aspire to for a comfortable retirement.

Consider the UK position, top 3% (although other posters mentioned 5%, the difference is not important) of individuals.  If the individual has all / bulk of the pension fund for the household (couple) then it is top 10%.  That is poor pension planning to have all the funds in one half of the household but also reality in many cases resulting from employee-linked pensions.

The trouble is, the "top 3% (or whatever) of all UK adults" is rather meaningless in the context of pension funds.
That entire group includes everyone from

• Student not yet had a job and pension fund zero
• 20yo first job and third pay packet making first pension contribution 8% of £20k for one month, that's £133 pension fund
• 67yo just about to retire - this is the time the individual will have the largest pension and the time that the £1m pot (or whatever the value is) becomes relevant
• 90yo with pension fund largely depleted

The critical assessment is the percent of individuals that have a £1m pension fund at the point just before retirement.

Now, consider that into the wider global expansion that has been suggested.  We see the same need to treat total pension asset value as a function relative to age / life-stage and also location.  The £1m may well be a far greater than average entry into retirement than the global average entry into retirement but what are the costs of living in those other global locations that are being considered?  Particularly, in the case of pensions, the costs of end-of-life care?  When my Father was looking for nursing home provision, the costs were £60k upwards per year.  

We should also not frown on those that have been prudent and reached a largely self-funding retirement.  Without these individuals having funds, the state funding would have to be massively increased and the state does not have the funds to do that.

Nah.

The average UK length of healthy retirement period (HRP) today is just 5 years.

The average UK length from retirement to death (RTD) is just 10-15 years.

Average retirement spending drops off a cliff at 70-75yo, as the body wears out and gets ready to expire.

A £1m pension pot, wisely invested, will deliver £100-200k a year from retirement to bad health and death, making the retiree among the top 1-5% of richest people in the country on annual income alone.

Anyone with a £1m pot is truly in a gilded position, both nationally and globally.

The average UK length from retirement to death (RTD) is just 10-15 years.

I think the average retirement age is 62 and the average life expectancy of someone retiring at that age is about 85.
So 10 - 15 years is an underestimate.
As to years of healthy retirement, I have no idea but I guess that this is affected by the definition of healthy. Many older people would accept some health issues as ' just getting old' and not class them as poor health as such.

Health state life expectancies can be found at https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/bulletins/healthstatelifeexpectanciesuk/2018to2020

Section 4 contains a regional map and a graph of the UK average. It appears that at 65, UK males have an average health state life expectancy of just over 10 years and females about 11 years.

As for reductions in retirement expenditure, according to Figure 3 of Brancati et al. (downloadable at https://ilcuk.org.uk/wp-content/uploads/2018/10/Understanding-Retirement-Journeys.pdf) expenditure drops fairly smoothly by about 3% per year between the ages of 70 and 80 (i.e. from £250 per week at 70 to £175pw at 80). Over the decade that amounts to a drop in expenditure of about 30%.