ONS Survey

ONS stands for The Office for National Statistics, a Government body, who just released a survey of the UK’s wealth. Their survey of 31,000 households was conducted over two years (mid-2006 to mid-2008), so doesn't give any indication how the recession has hit personal wealth.
The total was calculated by adding the value of the family home against mortgage, cash, savings, possessions and pensions. It excludes business assets, and rights held to future payments, such as the state pension.
All their figures are medians, rather than means. Statisticians prefer medians, as it's the value below which half the households fall, and not distorted by a few very large numbers.

Household wealth has reached £9 trillion in the UK.
The wealthiest 10% owns 44% of the country’s wealth.
The richest 20% owns 62% of wealth.
The wealthiest 50% owns 91%.
Ergo, the poorest 50% of the UK owns just 9% of its wealth.
The poorest 10% of homes also have negative wealth.

The average wealth of households is put at £204,500, but the South-east of England has a median household wealth of £287,900. The lowest median is Scotland, with £150,600.
Married couples with children are likely to be worth £414,100  –  17 times the £24,600 value of an average single parent household.
A household headed by someone with a degree is valued at £400,200, but without qualifications, that figure is just £105,500.
By employment, households headed by the self-employed were the wealthiest, at an average of £283,200.

Of that wealth, 39% is property assets, 39% pensions, 11% cash, and 11% physical wealth – such as cars and antiques.
Dominant source of wealth shifts as your wealth increases. Physical assets are the main asset for the poor, housing for those in the middle class, and pensions are most important for the wealthiest 10%.

PENSIONS
Only 57% of people have any private pension provision.
4 out of 10 men and 3 out of 10 women pay into a private pension, the value of that pension averages £39,300 for men and £29,000 for women.
The median amount of pension is just £4,900 across all ages, and peaks at £32,900 for those aged 55-64.
4 out of 10 people said they would rather have a good standard of living today, than save for their retirement.
25% of people expect to pay for their retirement by selling their house and moving to a smaller one or to a cheaper area.

PROPERTY
The survey suggests that households are roughly evenly split – 33% own their home outright, 33% have a mortgage and 33% rent. 3% of households own a property overseas, and 6% own a second home in the UK.
Among homeowners, the average equity is £150,000. The greatest property wealth is in London, where an average family has £220,000 sunk in their home.

SAVINGS & DEBT
62% of UK households have a savings account, but 50% have less than £3,500 in theirs and 25% have less than £500.
In the South-east of England, a typical household has £10,500 in cash.
Median amounts held in savings and current accounts were respectively £800 and £3,500.
These amounts are cancelled out by non-mortgage borrowing, which averages £3,400 across all households, but is £7,200 among those with any debt.

25% of households have negligible, zero or negative financial wealth.
35% of households have never saved any money at all.
48% of households have some outstanding unsecured borrowing.
10% of households are in arrears for at least one commitment.

25-34 year olds are most likely to have racked up unsecured debt, with 68% of this group in this position; their debts average £3,700 each.

POSSESSIONS
Families assessed their possessions' value at on average £29,900.
Household goods, (furniture, plasma televisions, clothes, etc.) came to about £25,000 for an average family.
The other £4,900 was made up from the value of cars and bicycles.
One in eight homes owned paintings, antiques or other valuables worth typically £5,000.
One in 20 drivers has a personalised number plate, typically reckoned to be worth £500.

Source: Daily Mail

Ooby Dooby Dubai

Last week, when Dubai World requested a "debt standstill" – a polite way of saying, “Sorry, not paying any interest any more” – I wasn't really surprised.

Dubai has hit the economic buffers mainly because it's a vast playground for the rich, that has zero assets, except the slave labour of the workers who've built it.

At almost the same moment as Dubai's debt crisis erupted, American actor Nicholas Cage went broke too. He went broke because he had bought too many castles, too many yachts, too many cars, too many everything. He was a one-man Dubai.

I read in The Financial Times that Royal Bank of Scotland is the most exposed of the UK bank lenders to Dubai. Of course it is.

RBS lent so much money, so profligately, that in the wind-up to the financial crisis, that it became the world’s largest bank (by assets) by a very large margin.

I wonder whether the RBS bankers who are now threatening to resign if their bonuses are blocked, are among those who, doubtless, earned very large bonuses a few years ago for winning the bid to lend to Dubai World.

And to Nicholas Cage: after all, the largest creditor of Michael Jackson's estate is Barclays bank...

Such a Thing as a Free Lunch?

Several hundred US Airmiles junkies discovered that a free shipping offer on Native American $1 coins, sold at face value by the U.S. Mint, was the equivalent printing free frequent-flier miles. Coin buyers charged the purchases, sold in boxes of 250 coins, to a credit card that offers frequent-flier mile awards, then took the coins straight to the bank. They then used that deposit to pay off their credit-card bills.

The coin program was a popular play on www.FlyerTalk.com, an online community where frequent flyers share travel tips and profitable mileage strategies. One FlyerTalker, identified by his online name, Mr. Pickles, claims to have bought $800,000 in coins.

He says his largest single deposit was $70,000 in $1 coins. He used several banks, and numerous credit cards. He earned enough miles to put him over 2,000,000 total at American Airlines, giving him lifetime platinum-elite status.

Hyatt Hotels Corp. currently offers its Gold Passport program members one free night for every two nights at one of its hotels. Charles Witt, from Washington, D.C., stopped by a suburban Hyatt hotel on his way home from work several times this autumn, swiped his credit card to buy a $50, room and then went home, never even opening the door to his hotel room.

For every $100 he spent, he got a free night at any Hyatt hotel. He's booked three free nights at the Grand Hyatt in Tokyo in the New Year – rooms that would have otherwise cost him $600 a night.

The allure of frequent-flier miles, which were introduced by American Airlines in 1981, was that they offered something for nothing. The miles rewarded loyalty and proved to be an extremely powerful marketing tool.

These days, airlines have turned miles into more than a competitive device; they have become a currency that airlines can sell, usually at less than a penny a mile, to other merchants to generate revenue. More miles are put into circulation by companies – including credit-card issuers, hotels, and mortgage lenders (C&G, recently) – than are given to travellers for flights.

The Airmile is such a cherished commodity that airlines have even bolstered their balance sheets by pre-selling billions of miles. Citigroup Inc., which gives away American AAdvantage miles to credit-card customers, agreed to lend American Airlines $1 billion in September. The loan is to be repaid between 2012 and 2016 – not in cash, but in Airmiles.

Introducing the Wilsons

Judith Wilson was a maths teacher. (You can tell she's a maths teacher by the tartan trouser suit she's wearing).

Husband Fergus could have had a thriving sideline as a professional Les Dawson impersonator.

Instead, in 1991, maths teachers Fergus and Judith Wilson began buying new-build properties in Ashford, Kent.

The rents covered their outgoings and the capital values rose in the mid-Nineties, so they have remortgaged and reinvested regularly.

After two decades spent building up a property portfolio, and now aged 59, the time has come for Fergus and Judith to sell.

They own 700 buy-to-let properties, worth £180 million.

Their website, at http://www.jwipb.co.uk/default.asp, is certainly worth a look.

Judith's number one rule is: Never use your own money.

Rule number two: Judith believes that because there are not enough properties in the UK to meet housing demand, that there is never a wrong time to buy property.

Here is more Buy-to-Let common-sense, the Wilson way…

1 You are in the business to make money, not to help people

Property is an investment and a commodity. Don't get emotionally involved with your tenants.

2 Buy two or three-bedroom houses – and never flats

Except if you're in London, where flats will be in greater demand than in suburban areas.

3 Buy new or nearly new

Avoid the cost and time spent doing DIY. New-build properties have the added benefit of a NHBC warranty, boiler guarantees, double glazing and tend to attract more professional tenants.

4 Choose your tenants carefully

Do checks to ensure they are creditworthy and have a guarantor who is a home-owner. And the best tenants? "Middle age couples who have recently got together from previous relationships," Fergus says. "They won't be moving and are likely to stay a long time."

5 Leverage your money

If you have £200,000 to invest, don't buy one £200,000 property, buy ten and put £10,000 down on each house, says Fergus.

6 Magnolia wins every time

"Don't impose your tastes on others by painting your house lots of colours. Stick to bread and butter houses. A two-bedroom mid-terrace house painted in magnolia and white is what most people want to rent," Fergus says.

7 Avoid ex-council houses or bungalows

8 Buy close to home

All of the Wilsons' properties are within 30 miles of their home. Don't buy in an area with a big retirement community. "You don't want economically inactive tenants."

9 No smokers or mechanics – but dog and cat owners welcome

10 Enjoy the experience of being a landlord