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'Asset rich, cash poor' Brits have just £1,574 in savings
Britons have an average of £40,900 worth of physical assets, such as cars and jewellery, but have very little in cash savings.
by Michelle McGagh on Apr 02, 2012 at 14:52
People in Britain are sitting on an average ‘physical’ wealth, things such as cars and jewellery, of £40,900, but have just £1,574 in cash savings.
The ‘Asset Rich, Cash Poor’ index devised by personal asset lender Borro shows the value of household assets in the UK, excluding property and investments, stands at a combined £1 trillion, an increase of 51% since 2006.
The average household has increased the worth of its assets by 4.7% since 2006, a reflection of the pre-recession spending boom.
Conversely, the average adult has just £1,574 in savings, a 15% decrease on last year, and 27% of people have no savings at all.
Those living in the South East are the most asset rich, with the average amount of household wealth standing at £48,400. Londoners are the least asset rich, with an average of £35,900 of physical assets, because more people rent in the capital and they are less likely to buy valuables and collectibles.
|Region||Average physical wealth (2006/2008)||Average physical wealth (2008/2010)|
|East of England||£44,000||£45,700|
|Yorkshire & the Humber||£36,900||£42,300|
Paul Aitken, chief executive officer of Borro, said Britons were becoming increasingly asset rich but cash poor and people were continuing to spend, although not at the same levels as seen pre-recession.
‘As people’s savings deposits have decreased we are seeing a nation of asset rich and cash poor adults emerge. More people are realising that they hold a wealth of assets that they can use to access finance – either to fund a business opportunity… or to cover temporary cash flow issues.’
The average amount that Borro lends has increased to £5,000, and the majority of loans are against diamond jewellery, luxury watches, prestige cars and fine art.
In 2006, £5.9 billion was spent on jewellery, clocks and watches, but cars have experienced the highest increase in spending, up 40% between 1997 and 2007. Nearly three-quarters of households, 73.4%, owned at least one car between 2008 and 2010.
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