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Wednesday, April 22, 2009

Property slump costs pensioners £220 Billion - maybe

This was the headline of an article in the Guardian.

I am not so sure.

The implications of the article are this:
  • Total value of pensioner’s property now equals £800 Billion hence
  • Original value was £1020 Billion so
  • Each pensioner is supposed to have lost £52,000 of the value of their property meaning
  • The number of pensioners owning property = 4.2 million but
  • Total number of people in the UK aged 65-85 = 8.7 million meaning
  • 48% of pensioners are property owners but
  • Total property ownership for the UK is 70% and
  • Older people have disproportionally high level of property ownership conclusion
Either my arithmetic is wrong or the originators of the research screwed up and the total loss is even higher. Both are possible explanations.

Whatever the answer it means that older people have suffered a big dent in their wealth (and their kid’s inheritance) to add to a list of woes including near to zero interest rates on their savings but...

Like all analysis, the averages only tell part of the story. Dick Stroud

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