Are you rich?

[Chris Type R]

Mr_J said:

At 48 when considering my 'wealth' I'm oddly pushed to considering the size of my pension pot rather than the amount of equity in my house.

A £550k house with £120k mortgage left to pay off doesn't feel like wealth.

Likewise, we might downsize.... but we need somewhere to live.

If the 25% tax free allowance remains, this will help with paying down the mortgage.

[lizardbrain]

monthou said:

I'd expect it to be a hell of a lot lower.
Maybe lots of people have savings as large as their house equity, but £120K sounds like someone who still on average has a significant chunk to pay off. You really think your average mortgagee with £120K equity also has a SIPP of equivalent size? I'd expect people's savings to increase dramatically in later years, as incomes rise / kids grow up / mortgages are paid.
And I'm not sure how your chart supports your point.

I 'believe' it in the sense I've not stumbled on any graphs arguing different ,whilst doom scrolling on the can...

The chart supports my point quite well I think, I shows the lower deciles have very little of their wealth in property, but as you go up the chart it peaks at about 50% then declines again. Which suggests it's not just a later life thing.

So to best of my very limited knowledge, it's right. . I'm always freshly surprised with how much the average brit's wealth is in SIPP. I guess I've always been pessimistic I'd live ot retirement age

[monthou]

lizardbrain said:

monthou said:

I'd expect it to be a hell of a lot lower.
Maybe lots of people have savings as large as their house equity, but £120K sounds like someone who still on average has a significant chunk to pay off. You really think your average mortgagee with £120K equity also has a SIPP of equivalent size? I'd expect people's savings to increase dramatically in later years, as incomes rise / kids grow up / mortgages are paid.
And I'm not sure how your chart supports your point.

I 'believe' it in the sense I've not stumbled on any graphs arguing different ,whilst doom scrolling on the can...

The chart supports my point quite well I think, I shows the lower deciles have very little of their wealth in property, but as you go up the chart it peaks at about 50% then declines again. Which suggests it's not just a later life thing.

So to best of my very limited knowledge, it's right. . I'm always freshly surprised with how much the average brit's wealth is in SIPP. I guess I've always been pessimistic I'd live ot retirement age

Maybe some people with £120Kish equity will chime in.

From the telegraph:

DT said:

According to the ONS, the median average UK pension pot is £32,700, yet this varies significantly depending on age and pension type. For 25-34 year olds, it's £9,300, but for 55-64 year olds it rises to £107,300.1 Apr 2024

https://www.telegraph.co.uk/money/pensions/private...

[AllyM]

Those median pension figures are grim. Young people really need to learn the merits of compounding and start looking out for their future.

[2 GKC]

NRS said:

There’s often a lot more judgement of those who don’t have money though, and a view it was all done by hard work rather than a lot done by time/government policies and so on.

I’d certainly say I am lucky enough to be rich, although I’m still in overall negative equity at 37. Around £115k in savings, flat is worth around £400k with around £200k left to pay off on the mortgage. Consider myself very lucky.

How is that negative equity?

[craigjm]

AllyM said:

Those median pension figures are grim. Young people really need to learn the merits of compounding and start looking out for their future.

Easy to say when you’re earning decent money. When your wages barely covers rent and the essentials the merits of compounding may as well be mandarin

[Ken_Code]

NRS said:

There’s often a lot more judgement of those who don’t have money though,

It seems to be more the other way round on here, judgement of those who do have money. Some people have a pathological need to downplay the effects of good planing, diligent work, adding value to your employer and so on, and to suggest that these things don’t matter.

[Tango13]

craigjm said:

AllyM said:

Those median pension figures are grim. Young people really need to learn the merits of compounding and start looking out for their future.

Easy to say when you’re earning decent money. When your wages barely covers rent and the essentials the merits of compounding may as well be mandarin

I started my private pension when I was 16 and whilst I've never been in a position to pay big numbers into it the power and beauty of nearly 40yrs of compounding has resulted in a pot quite a lot bigger than the average for my age group.

There's a good chance I'll be able to afford hot food two or maybe even three times a week when I retire!!

[AllyM]

Tango13 said:

I started my private pension when I was 16 and whilst I've never been in a position to pay big numbers into it the power and beauty of nearly 40yrs of compounding has resulted in a pot quite a lot bigger than the average for my age group.

Indeed. It is not difficult.

I started an apprenticeship at 17 and have never not contributed. Now 34 and have a NW that is multiples of the figure in the OP. Through average work and compounding.

I feel comfortable, not rich.

[craigjm]

AllyM said:

Tango13 said:

I started my private pension when I was 16 and whilst I've never been in a position to pay big numbers into it the power and beauty of nearly 40yrs of compounding has resulted in a pot quite a lot bigger than the average for my age group.

Indeed. It is not difficult.

I started an apprenticeship at 17 and have never not contributed. Now 34 and have a NW that is multiples of the figure in the OP. Through average work and compounding.

I feel comfortable, not rich.

But you are applying a “boomer” or “gen x” mindset to it. When you are talking the “here for a good time not a long time generation” you are never going to persuade them to even put a couple of quid in a pension.

[The Moose]

Is that £120k worldwide or UK?

This is an interesting question although I’d be as interested to know what people think their net worth would need to be to feel ‘rich’.

Lifestyle creep is a bh!

[NRS]

craigjm said:

AllyM said:

Tango13 said:

I started my private pension when I was 16 and whilst I've never been in a position to pay big numbers into it the power and beauty of nearly 40yrs of compounding has resulted in a pot quite a lot bigger than the average for my age group.

Indeed. It is not difficult.

I started an apprenticeship at 17 and have never not contributed. Now 34 and have a NW that is multiples of the figure in the OP. Through average work and compounding.

I feel comfortable, not rich.

But you are applying a “boomer” or “gen x” mindset to it. When you are talking the “here for a good time not a long time generation” you are never going to persuade them to even put a couple of quid in a pension.

Lots of young people are doing what they can and not blowing the money. But it’s a very different situation these days. Degrees are normal, so far more jobs demand them even if they’re not really required, so you start life with a lot more debt instead of the company paying you while you train. Then increased house prices to wages ratios means bigger and longer mortgages, often you can only buy when into 30’s when most people then start with kids and so on. It’s far harder to save for a pension when you have to save a big deposit for a house, in a period of a few decades where wages have only matched inflation and you often need to start out with a lot of debt for many careers.

The ones spending like crazy tend to be the bottom level who will never have savings, or the ones who are set for life because of the bank of mum and dad giving them a house or huge deposit.

2 GKC said:

NRS said:

There’s often a lot more judgement of those who don’t have money though, and a view it was all done by hard work rather than a lot done by time/government policies and so on.

I’d certainly say I am lucky enough to be rich, although I’m still in overall negative equity at 37. Around £115k in savings, flat is worth around £400k with around £200k left to pay off on the mortgage. Consider myself very lucky.

How is that negative equity?

Sorry, wrong terminology. Mixing up with the way the government counts total wealth for the wealth tax here, which as of now means I have ‘0’ wealth and theoretically have more debt than wealth as the house is partly reduced in value for the calculation. It encourages people to buy better/bigger property as if you have over around 150k in wealth you’ll have a wealth tax each year, but a house only counts for I think 1/3 of the real value so it ‘hides’ money. Second houses though get far less discount.

[Thankyou4calling]

[Tango13]

craigjm said:

But you are applying a “boomer” or “gen x” mindset to it. When you are talking the “here for a good time not a long time generation” you are never going to persuade them to even put a couple of quid in a pension.

When I started my pension at 16 obviously I was the youngest person in the company, even now I can still remember thinking that some of the blokes aged 21 were old men and anyone over 25 was ancient.

I was sat down in front of a financial advisor and told that by the time I retired the state pension probably wouldn't be worth a cup of cold piss and if I took out a private pension I could possibly retire early.

I was only earning something like £65~70 a week so I wasn't paying much into the pension. I wasn't exactly thinking long term either, it was just the thought of jacking in work early that spurred me into starting a pension, nothing else.

[PM3]

So he was, at age 36 very poor . Nothing like a quote from a failure at subject quoted. He probably never said it anyway.

[Thankyou4calling]

PM3 said:

So he was, at age 36 very poor . Nothing like a quote from a failure at subject quoted. He probably never said it anyway.

100% he said that, as for the rest of your post I'm afraid I don't understand it.

[jdw100]

Survey is a bit pointless, in my opinion, without an age bracket.

If you are 25 and have £120k in the bank - well done you!

If you are 50 and have savings (inc pension) of £120k, you should be deeply concerned.

[GT03ROB]

DT said:

According to the ONS, the median average UK pension pot is £32,700, yet this varies significantly depending on age and pension type. For 25-34 year olds, it's £9,300, but for 55-64 year olds it rises to £107,300.1 Apr 2024

https://www.telegraph.co.uk/money/pensions/private...

AllyM said:

Those median pension figures are grim. Young people really need to learn the merits of compounding and start looking out for their future.

I'd say those figure show an issue with all age groups. Median pot for somebody about to retire of 107k..... that buys nothing.

It seems the young have not been set a good example by their elders

[Mr Magooagain]

jdw100 said:

Survey is a bit pointless, in my opinion, without an age bracket.

If you are 25 and have £120k in the bank - well done you!

If you are 50 and have savings (inc pension) of £120k, you should be deeply concerned.

It depends, again, on personal circumstances and expenditures.

I’m comfortable but I’m not in the uk where I would be extremely average or less. Some would say I’ve done well but my wealth is peanuts but my lifestyle is rich beyond some peoples dreams!

Good health is wealth. Money is just a tool.

[Shnozz]

Tango13 said:

When I started my pension at 16 obviously I was the youngest person in the company, even now I can still remember thinking that some of the blokes aged 21 were old men and anyone over 25 was ancient.

I was sat down in front of a financial advisor and told that by the time I retired the state pension probably wouldn't be worth a cup of cold piss and if I took out a private pension I could possibly retire early.

I was only earning something like £65~70 a week so I wasn't paying much into the pension. I wasn't exactly thinking long term either, it was just the thought of jacking in work early that spurred me into starting a pension, nothing else.

Very sensible but likewise a sad reflection of ‘work’ that in your first year the driving factor was to retire early!