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Revealed: How The Average Person Has Lost £11,300 During The Recession

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The average well-educated couple lost more than £35,000 during the recession, a dramatic study revealed today.

The authoritative research, from Britain's leading independent economic experts, reveals the crippling financial impact of the downturn.

It is the first time that anybody has managed to put a price on the recession, working out how much money it wiped off our homes, our savings and our pensions.

The report, from the respected Institute for Fiscal Studies, revealed that everybody has paid a heavy price, with the average person losing £11,300 - equal to £22,600 for a couple.

But the average figure mask the fact that graduates, who tend to be wealthier and therefore have more to lose, have been hit much harder.

For a couple with no qualifications, their average loss was £14,000, or £7,000 per adult.

For couples who had qualifications but did not get a degree, their loss was £20,800, or £10,400 per adult.

But the biggest losers were graduate couples, who have lost an average of £35,200, or £17,600 per adult - a hard-earned amount which many cash-strapped families will bitterly resent.

As they are 'average' figures, this means the impact on millions of people will be even greater.

Rowena Crawford, a research economist at the Institute for Fiscal Studies, said many people will have been tipped into negative equity as a result of the recession.

This is because house prices have fallen sharply from their peak of £186,000 in October 2007 to around £170,000 today.

She said: 'Their loss of equity in the property could be very large. In other words, it may have moved them into negative equity.'

This is when your mortgage is bigger than the value of the property, a nightmare if you need to move home.

The research is based on official figures of people's total wealth, from their investments and other savings to the value of their pension and their property.

Researchers from the Institute for Fiscal Studies compared their value before the recession to their value in autumn last year.

It comes as experts fear many people will be forced to work longer as a result of the downturn and its impact on their savings.

Wow why hasn't the Wail really gone for it and added on the national debt to this figure.

I wonder if most of this loss is in property values and pensions?

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The best off households, which are typically headed by someone aged between 55 and 74 with a degree, saw around £25,000 knocked off the total value of their wealth between 2007 and the autumn of 2009.

But less well off households, headed by people aged under 35 with no qualifications, lost an average of just £2,000 during the same period, according to the Institute for Fiscal Studies (IFS).

The group said the lower loss was because these households had less wealth to begin with and also tended to hold it in safer assets, such as bank and building society accounts.

Across all households where the head of the house has below degree level qualifications, total wealth is thought to have fallen by 5% to 6% between 2007 and 2009.

The research, which was commissioned by the Department for Work and Pensions, comes amid concerns that households' shortage of confidence could derail the fragile economic recovery.

With the Government committed to sharp cuts in spending, the onus will fall on businesses and the consumer to keep the economy growing and avoid a "double-dip".

The Treasury's independent forecaster warned this week that living standards could decline for four years.

The Office for Budget Responsibility (OBR) predicts that inflation will outstrip wage rises, leaving workers taking an effective pay cut.

The less hysterical version.

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<br /><a href='http://www.telegraph...h-IFS-says.html</a><br /><br /><br /><br />The less hysterical version.<br />
<br /><br /><br />

Just as detached houses are the first to shoot up in price beyond most buyers when they rise - when they fall, they fall the quickest back into touch!

Why didnt the reports state the £Trillion+ given to the City Bankers to keep rich shareholders from losing their fortunes - that's where a huge proportion of their money went!

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Nothing about the wealth gain due to 'soaring' property prices from 2000 up to 2007 ... thought not just the 'loses' as property prices have fallen since 2007.

The government really does need to put some measures in place to protect the boomers' wealth. There must be some way of transferring wealth from the young to the more deserving elders and betters. That Mr Brown knew what he was doing.

I know this is pedantic, but there was no "wealth" gain. The money never existed and even if it did Money is not wealth. It is expropriated debt from the future based on nothing.

I repeat myself to boredom, but read Adam Smith or Marx to understand Wealth.

A simplified version exists in Robert Tressell's seminal "Ragged Trousered Philanthropists" viz 'The Money Trick' - which in my humble view, everyone should read (or at least Google. To not look at this simplified explanation of how Capitalism works is to deny yourself an education more important than geometry).

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I do like the way the MSM is now, on the basis of immesurably small positive growth, referring to the recession in the past tense as if it was some sort of massive holiday bender we went on in Ibiza last year.

The "growth" was increased spending by the DSS and the NHS (ONS figures). The "real" economy where people make stuff is still in decline.

I can't be ar$ed to do the maths but I would be unsurprised to find that if you take out the previous government's bank tax funded spending driven by MEW/HPI the "recession" probably started about 2006, if not earlier, there was a small dip late 2004 that should have been the end of the house price cycle (I thought it was and sold :()

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  • 428 Brexit, House prices and Summer 2020

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