The wealth of our nation: who owns what in 21st century Britain
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Conor D'Arcy's slides from our event.
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The wealth of our nation: who owns what in 21st century Britain
- 1. RF #wealthRF The generation of wealth: Asset accumulation across & within cohorts
- 2. RF #wealthRF Session One John Hills, Director of the International Inequalities Institute at the LSE Gemma Tetlow, Economics Correspondent at the Financial Times Conor D’Arcy, Policy Analyst at the Resolution Foundation Torsten Bell, Director of the Resolution Foundation (chair) Intergencommission.org 2
- 3. RF #wealthRF The generation of wealth: Asset accumulation across & within cohorts Conor D’Arcy June 2017 @conortdarcy / @resfoundation
- 4. RF #wealthRF Why does wealth matter? • Supports short-term living standards • Crucial to living standards in retirement • Inequality a concern too • Signs that younger cohorts are not building up wealth Intergencommission.org 4
- 5. RF #wealthRF An overview of wealth
- 6. RF #wealthRF Britain is wealthier than ever, with property and pensions the biggest components Intergencommission.org 6 Total wealth: 2012-14 (nominal values), UK
- 7. RF #wealthRF Wealth inequality is high and rising after long term falls Intergencommission.org 7 Gini coefficient for wealth, total net family wealth per adult
- 8. RF #wealthRF Massive geographic inequalities too Intergencommission.org 8 Mean and median total net family wealth per adult by country/region: 2012-14
- 9. RF #wealthRF Wealth across and within the generations
- 10. RF #wealthRF The old have more wealth but key issue is generational progress Intergencommission.org 10 Median family total net wealth per adult, by age: 2012-14
- 11. RF #wealthRF Decent trends in private pension wealth but big question marks over future Intergencommission.org 11 Median family private pension wealth per adult, by cohort: 2002-03–2012-14
- 12. RF #wealthRF Decent trends in private pension wealth but big question marks over future Intergencommission.org 12 Median family private pension wealth per adult, by cohort: 2002-03–2012-14
- 13. RF #wealthRF Generational gap emerges with property boom of 90s and 00s Intergencommission.org 13 Mean family net property wealth per adult, by cohort: 1993-2015
- 14. RF #wealthRF Overall, younger cohorts less wealthy at the same age… Intergencommission.org 14 Median family total net wealth per adult, by cohort: 2006-08–2012-14
- 15. RF #wealthRF But it’s not just a millennial/gen X issue Intergencommission.org 15 Change in median family total net wealth per adult as % of preceding cohort's wealth at the same age: 2006-08–2012-14
- 16. RF #wealthRF Growing inequalities within cohorts matter too Intergencommission.org 16 Percentiles of family total net wealth per adult, by cohort: 2006-08–2012-14
- 17. RF #wealthRF What’s driven rising wealth?
- 18. RF #wealthRF What’s driven rising wealth? • We quantify how much of these increases was driven by: – active behaviour e.g. putting income into savings or accruing pension rights vs. – passive gains i.e. ‘unexpected’ external forces or ‘luck’ Intergencommission.org 18
- 19. RF #wealthRF Property wealth growth driven mainly by house price boom Intergencommission.org 19 Active and passive changes to family net property wealth per adult, by cohort: 1993–2012-14
- 20. RF #wealthRF Pensions more complicated but ¾ of gains due to ‘valuation’ changes Intergencommission.org 20 ‘Valuation’ and ‘non-valuation’ changes to family private pension wealth per adult, by cohort: 2006-08–2012-14
- 21. RF #wealthRF Conclusions • Wealth is big, growing but often overlooked • Wealth inequalities are wide • Generational progress is going backwards – for younger baby boomers as well as millennials • Inequalities within cohorts important too, including on gender and geography • Much of property and pension wealth growth over the past 20 years has been down to luck rather than savings Intergencommission.org 21
- 22. RF #wealthRF The generation of wealth: Asset accumulation across & within cohorts
- 23. RF #wealthRF Session Two David Willetts, Executive Chair of the Resolution Foundation Nick Pearce, Director of the Institute for Policy Research, Bath University Rachel Sylvester, Columnist at The Times (chair) Intergencommission.org 23
- 24. RF #wealthRF The generation of wealth: Asset accumulation across & within cohorts
- 25. RF #wealthRF Wealth has grown, wealth taxation hasn’t Intergencommission.org 25 Aggregate wealth & wealth taxation as % of GDP: 1955-2015
Notas del editor
- Wealth has grown in relation to prices and the size of the economy over both a short and long timeframe – now 6.5 times GDP, up from around 2.5 times in late 70s
- Quickly flagging importance of who you look at - difference between family and household and per adult element
- Take time to explain chart
- Explaining cohort lines but same idea as last chart Broadly tracking and auto-enrolment a help but: 1) sharp rises linked to valuation may not be repeated, 2) fewer in DB (IFS stat) so less benefit from future changes, 3) need higher replacement rates
- Explaining cohort lines but same idea as last chart Broadly tracking and auto-enrolment a help but: 1) sharp rises linked to valuation may not be repeated, 2) fewer in DB (IFS stat) so less benefit from future changes, 3) need higher replacement rates
- Not including slide for financial cos it’s small part (and looks weird) but follows rough trend of property
- For example, the 1976-80 cohort records 36 per cent less wealth at age 35 than the 1971-75 cohort.
- But tipping point from 1956-60 onwards
- Explaining slowly what the chart shows On average, the Gini coefficient within cohorts in the 1960s, 1970s and 1980s is 5.4 per cent higher than the cohort born five years before them at the same age
- Those born
- Explain how much DC pot buys you Valuation changes due to people living longer and interest rates being lower Amounts to windfall of for 1950s cohort of £80k property windfall and £45k pension valuation windfall. For those born in the 70s, £35k and £10k These things could happen again – or something unforeseen – but given trends on DB and homeownership it seems unlikely to have big benefit