Are you rich? How much money, money, property and pensions does it take to be rich?

If you have £90,000 in the bank, a house worth more than £310,000 and a pension of £627,000, then you can consider yourself rich, new research reveals.

That’s what people with the top 10 percent of assets in the country typically have, and they’re most likely to enjoy that prosperity in their early 60s, just before they retire.

Meanwhile, the richest 20 per cent of households have a median after-tax income of around £78,400 a year, but reach that level of wealth at a younger age, according to the Hargreaves Lansdown study.

Family households with that amount of income usually have around £840 left over at the end of the month and manage to save just over £10,000 a year.

They have around £35,800 in cash, including almost £10,000 in their current accounts, hold an average of £39,500 in stocks and shares Isas, and have so far built up a total of around £294,000 in pensions.

High-income families are still accumulating wealth and tend to be younger than older asset-rich groups, says Sarah Coles, director of personal finance at Hargreaves Lansdown.

“If we rate the wealthy as those who have a lot of assets, this tends to peak at 60-64, when we have an average of £380,100 in wealth,” he explains.

“It tends to start low, increase slowly, and then accelerate as we reach age 55. Then we spend gradually as we move into retirement, so the next richest group is those aged 65 to 74.”

Coles notes that people aged 60 to 64 have nine times more wealth than people aged 30 to 34.

Hargreaves used official data plus his own Savings and Resilience Barometer, compiled in partnership with forecasting firm Oxford Economics, to reach his conclusions about who is considered wealthy.

The barometer is based on data from the Office for National Statistics’ Wealth and Assets survey – which draws its information from 10,000 households – plus other data from official sources.

Are you rich enough to be the target of the budget?

The Government might think that the higher earners described above have room in their budgets to pay more tax, says Hargreaves’ Sarah Coles.

But while this group may feel comfortable, imposing higher wealth taxes on them will not be as fruitful as those who have already accumulated wealth, he believes.

The richest group in terms of assets is around 60 years old.

Coles says: “If you are in this situation and have been carefully accumulating assets to fund your retirement, the thought of losing them to taxes at an age when you have fewer options to rebuild your wealth could be particularly worrying, especially given taking into account the increase in social investment”. care costs.

“However, the Government will be aware of this, so while it may seem like a fiscal target, they would need to consider the risk that damaging the wealth of those who have recently retired could mean they fall short as they age.” , and It is necessary to resort to the State.

“It means that instead of focusing on wealthy groups of people, the government could simply take a larger portion of everyone as they increase their wealth.”

This could mean the Government decides to increase the capital gains tax rate, although the risk then is that people keep their gains until they die, when CGT resets to zero under the current rules, Coles explains.

Therefore, the Government could change those rules, so that the capital gains tax is not reset to zero and your estate may have to pay it in addition to any inheritance tax.

‘They may also decide that inheritance is a useful goal, because it is not money that people will depend on later in life.

‘However, while it will not affect those who have spent their lives building assets, it will affect your family, who may rely on an inheritance for key life milestones such as buying a home or retiring. It could derail people’s plans.

How do you protect your assets against future changes?

Sarah Coles explains your options in various scenarios.

You’re sitting on capital gains.

– Take advantage of your annual capital gains tax relief as you go – it’s currently £3,000 a year.

– Sell, wait 30 days and buy the same assets, sell and buy different assets immediately or use the Bed & Isa process to sell and buy the same assets immediately, protecting them from capital.

– You can offset losses from the same year against your profits when calculating how much tax you owe. You can also extend them for one year. You must report losses when you make them so you can carry them forward.

– Consider a Stocks and Shares Isa for your investments, because any growth is free of both capital gains tax and dividend tax.

> How does capital gains tax work?

Your Estate May Owe Inheritance Taxes

– Give gifts that fall within your annual gifting allowance of £3,000.

– Give away larger sums and they will be out of your estate after seven years.

– Give away excess income from your regular monthly income if you can afford it after covering your usual living costs.

– Pay the children in your life under 18 years of age in Isas Junior.

> 10 ways to avoid inheritance tax legally

You hope to receive an inheritance.

– Make sure essential expenses during retirement are covered regardless of whether you receive an inheritance or not. This can come from a combination of state pensions, workplace and personal pensions, as well as any other investments.

– If your pension savings fall short, have a solid plan B that you’re willing to use, such as downsizing your home, working longer or working part-time in retirement.

– If an inheritance is likely to play a role in your retirement income, be as sure as possible that you will actually get one by talking about it with your loved ones. You may find that they are happy to make gifts for life, which could be more tax efficient.

– Prepare for any inheritance to help you pay for extras that make your life more comfortable or give you the lifestyle you want in retirement.

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