KUALA LUMPUR: The richest 1,000 families in Britain now control £547bil (RM3 trillion), an increase of 112% since the financial crisis, with London having more billionaires than any world city.
London now has 80 billionaires, up from 72 last year, said the Guardian, quoting the 2015 Sunday Times Rich List.
The richest 1,000 families have more money than the poorest 40% of British households combined, said the Guardian, quoting the Equality Trust.
In Australia, taxation statistics show that its richest live in harbourside Sydney and earn more than eight times the nation’s poorest, who live in rural New South Wales.
This again highlights the enormous pay gap between the nation’s richest and poorest – there’s an average income difference of A$155,823 between the richest and poorest postcodes, said the Sydney Morning Herald (SMH), quoting the latest taxation statistics for 2012-13.
Australia’s highest earning professions range from surgeons, anaesthetists, “internal medicine specialists” (diagnosing internal disorders), financial dealers, judicial and other legal professionals.
The remaining top 10 included psychiatrists, mining engineers, “other medical practitioners,” chief executives and managing directors and “generalist medical practitioners”.
No matter how much wealth is accumulated, millionaires surveyed by UBS expressed fear that they could lose it all with one wrong move, said the Singapore Business Times.
Half of those with US$1mil-US$5mil are afraid that one major setback such as job loss or market crash would have a significant impact on their lifestyle, versus 34% of those with US$5mil plus.
And those with US$1mil want US$2mil; those with US$10mil want US$25mil.
In the midst of these reports of wealth, the share of household income needed to pay off a home loan for a typical house in Sydney is near a ten-year high despite interest rates being at their lowest levels in decades, said the SMH, quoting Moody’s.
Based on how much a two-income household, with average incomes, would need to cover the monthly loan repayments on a median price house, it was discovered that in Sydney, the ratio rose to 35.1% in March, compared with 32.8% a year earlier.
While the ratio for Sydney is still below the highs of about 38% that it reached in 2008, the rise is significant.
This is given the very low levels of interest rates today, and a return to more normal interest rates would push the ratio up sharply, said the SMH, quoting analysts.
In 2008, the Reserve Bank of Australia had raised official interest rates to 7.25% to contain inflation from the mining boom, compared with just 2.25% today.
Affordability had also worsened in Melbourne, where the share of income required to pay back a loan for a typical house had increased to 28.2%, up from 27.5% a year earlier.
Another disturbing report concerns retirees and the increasing risks they face.
Global retirement income systems are under a lot of pressure, and people on the verge of retiring are in a “much worse position” than those who retired a decade ago as the cost of purchasing an annual flow of future income has gone up “a lot,” said the SMH, quoting RBA governor Glenn Stevens.
The problem “must be acute” in Europe, where sovereign yields in some countries are negative for significant durations, Stevens was quoted as saying at the Australian Financial Review’s Banking and Wealth Summit.
“How will an adequate flow of income be generated for the retired community in the future, in a world in which long-term nominal returns on low-risk assets are so low?
“Just about everywhere in the world, the price of buying a given annual flow of future income has gone up a lot.
‘’Those seeking to make that purchase now – that is, those on the brink of leaving the workforce – are in a much worse position than those who made it a decade ago.
“They have to accept a lot more risk to generate the expected flow of future income they want,’’ Stevens was quoted as saying.
Income inequality has been a pressing problem for economies and some of the latest statistics show the widening gap between high and low incomes despite various measures undertaken to bridge the gap.
The happiness index, in some of these cases, need to be re-examined as priorities seem to be shifting more to material achievements.
The pressure of keeping up a decent standard of living in some cities with inflated property prices and for retirees struggling for some income in a low interest rate environment presents a higher set of risks that may need to be tackled with a different set of skills.