Being considered a millionaire will become “meaningless” over the long-term, according to a North West wealth management expert.
Ben Rogers, who has worked at Wilmslow-based company Equilibrium since 2015, questioned what it really means to be a millionaire.
“It’s just a number,” he said. “But it’s a number that holds a lot of significance for a lot of people. People often associate being a millionaire with financial security, financial freedom or even financial extravagance.
He was speaking after the release of figures from the Office for National Statistics (ONS) which shows that the number of millionaires in Britain has risen by a third when comparing the period 2012-14 and 2014-16.
Reflecting on the figures Ben said: “A millionaire today is not worth the same as a millionaire 10, 20 or 30 years ago. Because of inflation, £1 million pounds today is the equivalent of £763,809 in 2008. Flip that on its head and 10 years from now the real value of your £1 million pounds could have fallen by nearly a quarter.”
That’s if inflation grows at the government target of 2.5% for the next 10 years, says Ben Rogers of Equilibrium Asset Management.
The Chartered Financial Planner also suggested that based on this target the average millennial’s grandchild will become a millionaire.
“Over the very long term becoming a millionaire therefore becomes meaningless,” he said. “If inflation does grow at the government target of 2.5% for the next 55 years, the average millennial’s grandchild will be a millionaire. They’ll have to be to live.”
ONS figures showed that 3.6 million households in Britain held wealth of more than £1m by June 2016, up 29% in two years.
According to the ONS, wealth includes investments, pension savings, belongings, and property values minus any outstanding mortgage.
“So, it doesn’t really matter that there are more millionaires now than there were two years ago. The more important thing is how these new-found millionaires are making their money work towards their financial goals, whether that’s security, freedom or even a little extravagance. And it all starts with making a plan.”