Where do Wealthy people keep their money ?

Grumpy_chap

uk1 said:

I was dealing from personal knowledge and experience with the question about people who have got as far as £1m in cash and what they might do with it which was the topic of this particular thread rather than as you believe “the rest of the forum”.  So, I was simply expressing an opinion about people with £1m + who currently have it in liquidity.  They have mostly paid off mortgages and have other assets including pensions, property etc etc.  

Others have commented about the percentage that have £1m in total assets as individuals or as households.

Out if interest, if known, what is the number of people that actually have £1m in liquid assets?  

For the sake of the question, I think it is fair to ignore those that have the £1m as a fleeting balance (e.g. between house sale and house purchase, or between receiving inheritance and clearing the mortgage, etc).

uk1

Grumpy_chap said:

uk1 said:

I was dealing from personal knowledge and experience with the question about people who have got as far as £1m in cash and what they might do with it which was the topic of this particular thread rather than as you believe “the rest of the forum”.  So, I was simply expressing an opinion about people with £1m + who currently have it in liquidity.  They have mostly paid off mortgages and have other assets including pensions, property etc etc.  

Others have commented about the percentage that have £1m in total assets as individuals or as households.

Out if interest, if known, what is the number of people that actually have £1m in liquid assets?  

For the sake of the question, I think it is fair to ignore those that have the £1m as a fleeting balance (e.g. between house sale and house purchase, or between receiving inheritance and clearing the mortgage, etc).

Thanks.

It is this group I also had in mind.  It wasn’t a question about “where do I temporarily” lodge £1m.  It was about “wealthy” people. For want of a better summary, my response is that having got thus far it isn’t a sum that obsesses them. 

Grumpy_chap

uk1 said:

Grumpy_chap said:

uk1 said:

I was dealing from personal knowledge and experience with the question about people who have got as far as £1m in cash and what they might do with it which was the topic of this particular thread rather than as you believe “the rest of the forum”.  So, I was simply expressing an opinion about people with £1m + who currently have it in liquidity.  They have mostly paid off mortgages and have other assets including pensions, property etc etc.  

Others have commented about the percentage that have £1m in total assets as individuals or as households.

Out if interest, if known, what is the number of people that actually have £1m in liquid assets?  

For the sake of the question, I think it is fair to ignore those that have the £1m as a fleeting balance (e.g. between house sale and house purchase, or between receiving inheritance and clearing the mortgage, etc).

Thanks.

It is this group I also had in mind.  It wasn’t a question about “where do I temporarily” lodge £1m.  For want of a better summary, my response is that having got thus far it isn’t a sum that obsesses them. 

That conveniently avoids answering the number / proportion that actually have that liquid £1m.

uk1 said:

bostonerimus said:

Many people will look at 1 Million and think "that's a lot of money to spend".
The retirement nerd will look at 1Million and think "that's an inflation linked 40k a year in retirement".
The truly wealthy will think "1 Million, that's just pocket money".

You clearly do understand this.  The people in this group consider it almost as “walking cash” for want of a better phrase. 

I am not familiar with the phrase "walking cash" - what do you mean by it?

uk1

Grumpy_chap said:

uk1 said:

Grumpy_chap said:

uk1 said:

I was dealing from personal knowledge and experience with the question about people who have got as far as £1m in cash and what they might do with it which was the topic of this particular thread rather than as you believe “the rest of the forum”.  So, I was simply expressing an opinion about people with £1m + who currently have it in liquidity.  They have mostly paid off mortgages and have other assets including pensions, property etc etc.  

Others have commented about the percentage that have £1m in total assets as individuals or as households.

Out if interest, if known, what is the number of people that actually have £1m in liquid assets?  

For the sake of the question, I think it is fair to ignore those that have the £1m as a fleeting balance (e.g. between house sale and house purchase, or between receiving inheritance and clearing the mortgage, etc).

Thanks.

It is this group I also had in mind.  It wasn’t a question about “where do I temporarily” lodge £1m.  For want of a better summary, my response is that having got thus far it isn’t a sum that obsesses them. 

That conveniently avoids answering the number / proportion that actually have that liquid £1m.

uk1 said:

bostonerimus said:

Many people will look at 1 Million and think "that's a lot of money to spend".
The retirement nerd will look at 1Million and think "that's an inflation linked 40k a year in retirement".
The truly wealthy will think "1 Million, that's just pocket money".

You clearly do understand this.  The people in this group consider it almost as “walking cash” for want of a better phrase. 

I am not familiar with the phrase "walking cash" - what do you mean by it?

I have no idea about how many there are.  So I didn’t “conveniently” avoid it.  I don’t know.  I don’t try to answer questions i do not know the answer to to. 

”Walking cash” is a rather unfortunate and silly phrase some use for the  amount you might have in your wallet.  

Grumpy_chap

I'm pretty sure those with £1m in liquid assets don't actually carry it around in their wallets...

uk1

Grumpy_chap said:

I'm pretty sure those with £1m in liquid assets don't actually carry it around in their wallets...

Grumpy_chap said:

I'm pretty sure those with £1m in liquid assets don't actually carry it around in their wallets...

Grumpy_chap said:

I'm pretty sure those with £1m in liquid assets don't actually carry it around in their wallets...

Correct.  No one does.  But it is likely in their bank accounts so that they can use their debit cards all day without hearing a “ping” which can be more unpredictable with even the best and darkest of aspirational credit cards in these heightened  security times.

Their debit card is in their wallet and so they do have £1m in their wallet. Hence “walking cash”.  

If this is a start of “grumpy” bickering I’m happy to duck away.  I’ve expressed my opinion and I am sorry you find it irritating.  

Grumpy_chap

Grumpy_chap said:

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.

Going back to this, I just found an article suggesting that 25% of pensioners are millionaires.
https://www.telegraph.co.uk/pensions-retirement/news/number-millionaire-pensioners-quadruples/
Unfortunately, it is pay-walled so I cannot see beyond the headline to see how the "millionaire" criteria is defined (total assets or liquid assets) and / or whether it is individuals or households.
I suspect it is households and total assets.

This thing about "wealthy pensioners" whereby pension value is assessed is really quite a recent concept.  A generation ago, final salary pensions would never have been assessed as having a value.  Today, those with final salary pensions are valued disproportionately highly.

uk1

You seem to be contorting your pre-defined agenda into an otherwise potentially interesting thread. 

I will defend your desire to be grumpy but only so far as it doesn’t disrupt an otherwise potentially interesting topic and shut down others you are grumpy with. 

😝

OldScientist

A partial answer to the original question (or as it seems to have developed through the thread) can be found at https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/totalwealthingreatbritain/april2018tomarch2020

in particular Figures 2 and 3 at that link are useful.

From Figure 2
Top 1% (at bottom of percentile range) have a total wealth (all assets) of £3.7m
Top 10% have 1.4m.

From Figure 3 (rounding may mean these do not add up to 100%)
Top 1% have 18% of their wealth in financial, 6% in physical, 30% in property, and 46% in pension
Top 10% have 10% in financial, 6% in physical, 30% in property, and 53% in pension

Excluding property, the percentages are
Top 1%: 25% financial, 9% physical, and 66% pension
Top 10%: 15% financial, 9% physical, and 76% pension

Definitions of categories are 

"net property (value of residences minus mortgage debt)

physical (household contents, vehicles)

private pension

net financial (savings or investments minus financial liabilities)"

The report notes that the breakdown between these 4 categories has been fairly consistent over the previous 14 years, so it is unlikely to have changed that much in the two years since the data were collected.

However, what this report doesn't provide is the breakdown of financial or pension assets between stocks, bonds, and cash or other, more exotic, investments.

On a different note, I found it interesting to sum up our own assets and locate our percentile.

Albermarle

OldScientist said:

A partial answer to the original question (or as it seems to have developed through the thread) can be found at https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/totalwealthingreatbritain/april2018tomarch2020

in particular Figures 2 and 3 at that link are useful.

From Figure 2
Top 1% (at bottom of percentile range) have a total wealth (all assets) of £3.7m
Top 10% have 1.4m.

From Figure 3 (rounding may mean these do not add up to 100%)
Top 1% have 18% of their wealth in financial, 6% in physical, 30% in property, and 46% in pension
Top 10% have 10% in financial, 6% in physical, 30% in property, and 53% in pension

Excluding property, the percentages are
Top 1%: 25% financial, 9% physical, and 66% pension
Top 10%: 15% financial, 9% physical, and 76% pension

Definitions of categories are 

"net property (value of residences minus mortgage debt)

physical (household contents, vehicles)

private pension

net financial (savings or investments minus financial liabilities)"

The report notes that the breakdown between these 4 categories has been fairly consistent over the previous 14 years, so it is unlikely to have changed that much in the two years since the data were collected.

However, what this report doesn't provide is the breakdown of financial or pension assets between stocks, bonds, and cash or other, more exotic, investments.

On a different note, I found it interesting to sum up our own assets and locate our percentile.

The Resolution Foundation did a similar exercise, using the ONS statistics linked above as part of their own research.
Without going into detail, two points are worth noting.
This study includes wealth from business ownership, which seems to be not mentioned in the ONS report, but is a large part of people's wealth at the top end of the scale.
The value of public sector pensions are ignored, as you do not own them as such. Not sure how the ONS survey calculates the value of private and public sector pensions in their survey.
The-UKs-wealth-distribution.pdf (resolutionfoundation.org)