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Expat Investor : October 2008
STATISTICS AND ANALYSES Average UK adult thinks they are worth £350K the East Midlands only value themselves at £300,000, with an average property at £142,000. Adults approaching, or already in A medley of statistics and analyses revealing much about our responses to saving, investing and spending our money. When it comes to putting a price on their life, the average UK adult believes they are worth £350,000, according to research by the Post Office. When asked to consider everything they own or value in their life, including their home, car, annual salary and all their possessions, respondents came back with an average amount of £350,000. Many people seem to value themselves in terms of their homes as their biggest asset, as there is a direct correlation with house prices and self-valuation. For example, Londoners value themselves at £500,000, with an average house price of £345,000 whereas those in Coming soon... Investorsto www.expatinvestor.com ESSENTIAL MONEY TALK 2008 GUIDE TO 4 EXPAT INVESTOR ? October 2008 expatinvestor.com retirement, emerged as the group who valued themselves the most (£500,000). On average people in their sixties valued themselves more than double that of people in their twenties and thirties. Regardless of the value people put on their lives, the Post Office says it is worrying how the majority of people don't have protection. Almost 36 million (75%) adults in the UK have no life insurance, exposing a financial risk to them and their family if anything was to happen to them. Although the cost of life insurance has dropped by 70% over the last 30 years, more than a quarter of adults (28%) claim they simply cannot afford it, while over eight million (18%) adults feel their lives are not worth insuring at all. Whilst it is natural that people may wait for certain ‘life' triggers before considering life insurance, it often inevitably slips down the priorities list. One in seven said they would take out life insurance when they have a child (14%) or when they buy their first house (13%) and one in 10 when they get married.However, four in 10 adults (39%) suggest they could already be at risk by saying they should take out life insurance as soon as possible. Just a quarter think saving important New research from Nationwide Building Society reveals consumers increasingly think saving is less important than it once was. In June just 26% of consumers thought saving was very important – compared to 49% of people in May and 46% of consumers in April. The Society’s research also revealed: ? Just over half (59%) of consumers think it is personally important for them to save - a decrease of 12% from May's report; ? Less than half (46%) of consumers are saving regularly, with 33% saving occasionally, whilst a fifth (20%) are not saving at all; ? Nearly two-thirds (61%) of people are saving less than they think they need to; ? However, 48% of consumers are optimistic that in six months' time they’ll be saving what they need to – although a third (32%) think they won’t be saving enough. Matthew Carter, Director for Savings, says, “Our latest research on consumers’ propensity to save is concerning. “A sharp decrease has been seen in the store people put on saving and, if this decline continues, there will be trouble ahead if consumers do not put money aside. “The increasing cost of living is clearly having an impact on household finances and consumers are prioritising bills over their savings. “It is encouraging that half of consumers are still saving regularly, but nearly two-thirds of people are not saving as much as they think they need to. “If the economic situation gets more difficult, without the money put aside to fall back on, these consumers may find the going gets even tougher.” Ignorant about effects of inflation And whilst we’re not saving enough, National Savings and Investments (NS&I) reports many British savers still do not appreciate what effect inflation has on their nest egg. Almost a third (31%) of people told NS&I that although they know what inflation is they don't understand how it affects their savings while almost one in 10 (9%) said they don’t know what inflation is at all. More than a quarter (28%) of people also had no idea how tax affects their savings. John Prout, NS&I’s Sales Director said, “It is concerning that many people don't understand what inflation is, or how it might affect decisions about saving or spending money. Inflation means that prices increase over time, so £100 today will buy you a little bit less in a year’s time. “It can be caused by increases in EXPAT