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Uk's Richest Can Save £18,680 A Year As Poorest 40% Spend More Than They Earn

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http://www.theguardian.com/uk-news/2014/may/29/richest-uk-save-poorest-spend-crisis-post-office-data

The richest 20% of the population in Britain will have, on average, the spare sum of £18,680 to put into their savings this year, while the poorest 20% will spend £1,910 more than they earn, latest figures suggest.

In research published this Thursday, the Post Office said saving was still being driven by the wealthiest people while lower earners were suffering a debt crisis. According to the Centre for Economics and Business Research, which undertook the analysis, this trend has been happening for the past 12 years.

The poorest 40% of the population have spent more than they have earned over this period, in contrast to the top 40% of earners who had money to save every year.

Even during the financial crisis of 2007-2008 those in the highest income brackets had enough disposable income to increase the amount they saved annually. By contrast, the rise of payday lenders in Britain's "Wonga economy" symbolised the squeeze on living standards faced by ordinary families, the report says.

Seems a sustainable recovery. All the poor need to do is continue to service the debt....

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Interesting the headline is shocking but clearly the savings of the top 20% make isn't equal. The top 1% save more than the people just inside 20%.

Thinking about it I am surprised the average number people are saving in the 20% bracket isn't higher.

The average annual savings of EVERYONE right of the 40k is only 18k per year?

Position-of-low-to-middle-earners-in-ann

Thats alot of very wealthy people who are spending almost all of there income.

http://en.wikipedia.org/wiki/Income_in_the_United_Kingdom

Edited by AteMoose

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What is their definition of saving?

Do they mean accounts and ISAs or do they include pensions?

Right now, I'd say I struggle to save in the cash account/ISA space partly because I have an expensive family and my wife's salary has only just got back to the pre-kids levels meaning I've been footing all the bills, but also because the tax regime is so awful..

I probably put a 300 quid away per month in cash/liquid assets. Pension wise is very different, as I get tax relief and also my employer matches my contribution - so typically I am squirreling about 16,000 into my work pension and then typically another 6k into a SIPP per year.

So by one measure I am under, but by the ther measure I am well over.

Edited by Mikhail Liebenstein

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This article has some very muddled definitions. It seems to use 'richest 20%' and 'highest 20% of earners' interchangeably as if assets and income were the same thing. There are probably only a few percentage points of overlap between those two groups. Most people in the 'highest 20% of earners' are probably stressed-out wageslaves in London/SE with a material standard of living less than the national average.

Edited by Dorkins

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What is their definition of saving?

Do they mean accounts and ISAs or do they include pensions?

Right now, I'd say I struggle to save in the cash account/ISA space partly because I have an expensive family and my wife's salary has only just got back to the pre-kids levels meaning I've been footing all the bills, but also because the tax regime is so awful..

I probably put a 300 quid away per month in cash/liquid assets. Pension wise is very different, as I get tax relief and also my employer matches my contribution - so typically I am squirreling about 16,000 into my work pension and then typically another 6k into a SIPP per year.

So by one measure I am under, but by the ther measure I am well over.

Is the mortgage being paid down too? Also how's the massive inflation theory going?

That is clearly not sustainable - what happens at renewal?

We have a mortgage that is currently at about £450k, and a joint income of about £190k, and even then the £2470 mortgage repayment still feels like a lot. Yes, I am sure if it was just the mortgage it would be fine, but you then have all the other costs of running a family which to some extent are proportionate to your lifestyle. As I see it, you buy a big house, have a couple of kids and before you know it you hire a nanny and have school fees to pay. The mortgage is no longer the biggest bill.

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This article has some very muddled definitions. It seems to use 'richest 20%' and 'highest 20% of earners' interchangeably as if assets and income were the same thing. There are probably only a few percentage points of overlap between those two groups. Most people in the 'highest 20% of earners' are probably stressed-out wageslaves in London/SE with a material standard of living less than the national average.

very true. I refuse to take jobs back in London because with no property assets in the city already, I'd be up against a tax + living costs scenario of well over 80% of outgoings even on a large salary.

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The F1 big man gets £10m every six weeks, £18K is not the real figure. The rich don't save in cash, they buy income producing assets or loss making assets and turn them around.

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The rich have a different mindset.

If you are 18 years old and every decision you make follows these rules, then every decision you make following will put you on the "right" course. The poor are rudderless, drifting aimlessly from one fad to another. The rich are cash flow positive, and minimize their expenses. They may not always be obvious to see, people driving clapped out Volvos are probably better off than you are!

Typical questions

Some one offers you a cigarette

A magazine says you are fat and ugly and this magic cream will sort your woes (only £199 +P&P)

A sleazy man offers you a get rich quick scheme!

A daily newspaper is moaning about the EU, banning straight bananas, you want to share the article (and the negativity) to your friends.

-----------------------------------------------------------------------------------------------------------

The billionaire mindset (you'll need this if you want to buy a HOUSE)

1. Will this help me, make me a billionaire?

YES goto 2.

NO goto 3.

2. Consider the risks and rewards and weigh it up. Afterwards, proceed with action, then go back to 1.

3. Do something else, then decide whether to proceed by asking the question at No. 1

-----------------------------------------------------------------------------------------------------------

Good Luck (although the rich make their own luck)

Edited by 200p

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The rich have a different mindset.

If you are 18 years old and every decision you make follows these rules, then every decision you make following will put you on the "right" course. The poor are rudderless, drifting aimlessly from one fad to another.

Typical questions

Some one offers you a cigarette

A magazine says you are fat and ugly and this magic cream will sort your woes

A sleazy man offers you a get rich quick scheme!

The billionaire mindset (you'll need this if you want to buy a HOUSE)

1. Will this help me, make me a billionaire?

YES goto 2.

NO goto 3.

2. Consider the risks and rewards and weigh it up. Afterwards, proceed with action, then go back to 1.

3. Do something else, then decide whether to proceed by asking the question at No. 1

Good Luck (although the rich make their own luck)

Should I reply to this inane comment?

No

Should I record myself not replying to this comment and post it on YouTube?

Yes.

Here comes the MONEY!

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Is the mortgage being paid down too? Also how's the massive inflation theory going?

Yes, it is being paid down - my pension pot will over take the mortgage in 2 years from now.

And we do have some massive inflation (not the sort we want ) - though I also see wages rising now.

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What is their definition of saving?

Do they mean accounts and ISAs or do they include pensions?

Right now, I'd say I struggle to save in the cash account/ISA space partly because I have an expensive family and my wife's salary has only just got back to the pre-kids levels meaning I've been footing all the bills, but also because the tax regime is so awful..

I probably put a 300 quid away per month in cash/liquid assets. Pension wise is very different, as I get tax relief and also my employer matches my contribution - so typically I am squirreling about 16,000 into my work pension and then typically another 6k into a SIPP per year.

So by one measure I am under, but by the ther measure I am well over.

Going a bit OT, but what's your investment strategy with the SIPP? What makes you run that in addition rather than just putting the 6k into the work scheme as well?

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