This did make me chuckle

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82170156#Comment_82170156

We have decidedly odd definitions of what constitutes high net worth individual in the UK depending on the instuition.

The FCA has in my view a nonsensical definition of HNW for complex sophisticated investor purposes of either £100k annual income or at least £250k of investable assets ( excluding home and pensions). In my view £250k is far too low by any metric, and I am at loss why anyone simply earning £100k annually can be automatically considered a sophisticated investor.

By contrast HMRC's specialist HNW unit focuses on individuals in £20 million+ bracket who annually collectively pay £3 to 4 billion in personal income tax and CGT ( a diminishing pool of individuals I imagine).

Private bank and wealth managers are nearer the mark at £1 to £5 million investable ( excluding home and pension pots).

horsewithnoname

https://forums.moneysavingexpert.com/discussion/comment/82171230#Comment_82171230

HMRC doesn’t have the resources to look at everything. Almost like it’s deliberate 🙄

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82171230#Comment_82171230

HMRC also has another definition for 'Wealthy Individuals' One step below HNW.

Salary > £200K .Assets over £2Million. I think this includes pensions and homes, but it is for individuals, not households.

They seem to make an assumption that such persons will probably have complex tax/financial affairs, and will have maybe adopted sophisticated tax planning to reduce their liabilities, that may lead to some non compliant behaviour.

From this I would think someone earning £200K and with £2M in assets, but only using the usual pension, ISAs, above board and well known tax avoidance measures, would be unlikely to come onto their radar.

zagfles

https://forums.moneysavingexpert.com/discussion/comment/82169315#Comment_82169315

https://forums.moneysavingexpert.com/discussion/comment/82170802#Comment_82170802

https://forums.moneysavingexpert.com/discussion/comment/82169450#Comment_82169450

I'm at the age where I'm going to a lot of retirement parties and inevitably pensions get discussed particularly when people see me as they seem to think I'm some kind of expert. These comments remind me of one guy who's known as a bit of a left wing nutter banging on about "the rich" when it turns out he has a £45k civil service pension (rock solid govt backed and fully index linked, so worth at least a million).

I pointed this out and someone started calling him Elon as he has an EV as well as his pension worth a million. He didn't seem to appreciate his new nickname 🤣

Oh the fun we have at parties. So much more fun than talking about girls, cars and football like the youngsters do.

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/82171230#Comment_82171230

Isn't the FCA definition of "HNW" at £100k income or £250k to invest really just a marketing phrase? It is a point at which IFAs might actually be interested in your business. It is probably set low as, frankly, who wouldn't like to be able to consider themselves as HNW?

I also understand that the FCA definition as not changed the thresholds for a number of years.

The HMRC definition is probably more aligned to what FCA would define as UHNW. HMRC are only interested in the threshold at which an individual's tax affairs are complex, and the tax paid high, and may warrant a Personal Relationship Manager. An threshold they set is probably more nominal in nature.

horsewithnoname

The majority of civil servants receive pensions on average of less than£10,000. So your acquaintance is not typical

zagfles

https://forums.moneysavingexpert.com/discussion/comment/82171676#Comment_82171676

Did I say he was? The point seems to have flown over your head 🙄Apparently the average DC pot at retirement is only around £60k but so what, this thread is not about "typical".

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/82171718#Comment_82171718

Is that the "average DC pot" or the "average retirement fund" of the "typical" person at the point of reaching retirement?

I am not sure if that is a clear question. What I mean is, it might not be unusual to reach retirement age with several "pots" originating from different employments throughout one's working career.

- An individual reaching retirement having held, say, ten jobs with each jobs resulting in a separate retirement "pot" of £60k has a "retirement fund" of £600k.

- An individual reaching retirement with an overall "retirement fund" of £60k will have a very different retirement than the individual with the ten "typical pots".

Is that "average pot at retirement" truly a value at retirement? I have seen other articles quoting similarly low "average retirement pot" value but that referred to all DC pension "pots" regardless of age, so the "average retirement pot" included some just reaching retirement and some just starting out with only one contribution.

zagfles

https://forums.moneysavingexpert.com/discussion/comment/82171773#Comment_82171773

Don't know, AI told me. Don't really care either as such figures aren't really useful except for those with vested interests eg pension providers arguing that people should contribute more or policy needs to change to nudge or force them to.

Same way as the average civil service pension will include people who only spent a few years in the civil service and have other DB/DC pensions as well but quoting a low average might make the less educated think they're hard done by.

Anyway all irrelevant to the Loadsamoney perceived bragging when people ask questions about their million pound pot cos they can't genuinely need advice or guidance when they're so filthy rich.

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/82171809#Comment_82171809

Hmm, so I asked AI "what is the average retirement pot?"

The service provide a table of data, so I selected the "Age 60's men £79k" pot for further clarification and asked "How many of those pots does the average individual have at retirement?"

The AI service said 2.4 pots, so an average £190k and then provided a table of how many pots are required:

Retirement Lifestyle	Required Private Pot Total	Equivalent Number of £79.3k Pots
Minimum	Covered mostly by the State Pension	0 pots
Moderate	£330,000 to £490,000	4 to 6 pots
Comfortable	£540,000 to £800,000	7 to 10 pots

But I was also given information that the average person at retirement has 2.4 pots but the average "youth" (18 - 34) already has 2.9 pots and the future outlook is for individuals to accumulate 12 pots.

So I asked for some further clarification and the AI went into melt-down just contradicting itself and going round in circles.