The total net worth of US households in the final quarter of last year was $122.9trn, says Justin Lahart in The Wall Street Journal. The figure had climbed from $111.4trn a year before. That’s unusual for a recession: after 2008 US household wealth fell and “then took years to recover”. The gains have been driven by rising stockmarkets and property prices, but Americans also have more cash on hand: $2.8trn, a 21% annual increase.
Households across 21 rich countries saved about $6trn during the first nine months of last year, says The Economist. That is roughly double what they would probably have put aside absent Covid-19, generating “excess savings” of $3trn. The rise in global savings does not follow the same pattern everywhere. In the UK and the eurozone it has been driven by lower expenditure owing to closed restaurants and more modest holidays. In Japan and the US, by contrast, it represents a rise in household income thanks to government stimulus cheques.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
In the UK, households have put aside £160bn in excess savings during the pandemic, or 12% of GDP, says Sanjay Raja in a Deutsche Bank note. Credit-card debt is also down by nearly 20% over the past year. These gains have been captured mostly by middle- and higher-income earners, with lower income groups reporting taking on more debt. Around 5%-10% of that savings pile is set to be spent over the coming quarters, delivering a “0.5% to 1% boost to GDP”. The impetus from excess savings will be “the driving force behind” the UK recovery this year.
-
Families suffer £20,000 lost income growth – are you feeling the pinch?Average incomes for working age families have increased by just 7% in the past two decades, research suggests
-
How to achieve a secure retirement, as more retirees admit to struggling with debtTwenty-six percent of retirees now have unsecured debt – a sharp rise compared to two years ago – with many underestimating how much a typical retirement costs
-
'Ride the recovery in emerging markets': Gustavo Medeiros of Ashmore Group tells MoneyWeekInterview What's the outlook for emerging markets? Gustavo Medeiros, head of research at Ashmore Group, gives his analysis and reviews progress in developing economies
-
'The City's big bet on green finance fails to pay out'Opinion Insurers and banks are backing away from “green finance”, and there is not much sign of the green boom we were promised. That’s a problem for the City
-
Why is English football thriving – and can it last?What has gone so right for English football? The national team has found its feet; the Premier League is swimming in money and profits are soaring
-
Should you invest in Pakistan – the Vietnam of South Asia?Opinion If Pakistan is now serious about reform, it’s time for investors to buy, says Maryam Cockar
-
'Why you must own gold and Bitcoin'Opinion The world is dedollarising, and gold and Bitcoin are the only alternatives. Buy now, says Dominic Frisby
-
'Britain is on the road to nowhere under Labour'Opinion Britain's economy will shake off its torpor and grow robustly, but not under Keir Starmer's leadership, says Max King
-
What are wealth taxes and would they work in Britain?The Treasury is short of cash and mulling over how it can get its hands on more money to plug the gap. Could wealth taxes do the trick?
-
UK bank stocks are no bargain – here's a safer alternativeOpinion Britain's banking sector faces severe political risks. Switch into this global financials trust instead, says Max King
