6O% of Britons die leaving less than £5000

[Miljah]

....I've just read in 'The Week'. Credited to The London School of Economics.

That surprises me; I would have thought it would be more cash or fewer people.

Do you feel that figure seems 'about right'?

Oops
..have whipped up a highly effective campaign against IHT and proposed care levies against estates whilst obfuscating the fact that even in this era of insane house price inflation, IHT affects only a small minority of estates.

Stating "the bleeding obvious" I would have said.

I suppose it depends where they extracted their data from. If property is held in joint names it will automatically pass to the surviving owner, so may not have featured in that data. If the surviving owner then needs care, the property might be sold to pay for that care, leaving very little to pass on when they die.
If you have rented all of your life the chances are may not have much by way of savings once you've had to live on a pension for a few years and still pay rent.

Link to LSE article www.lse.ac.uk/News/Latest-news-from-LSE/2019/02-Feb-19/Most-of-us-die-virtually-penniless-says-new-LSE-research

My partners mom is in a care home due to dementia self funding and her care costs are £6500 a month so though she was fairly well off the money she had is dissapearing fast and one more year and her flat will have to be sold off to fund just 15 months more care, when thats gone if she lives that long it will be council funded home and nothing to leave to her heirs so £5000 isnt an unrealistic figure for people to have at death i wont even leave that as i wont have that sort of money

I intend to do my utmost to spend all my money and liquidate my assets before I die, as I have no one to leave them to. Perhaps I'm not the only one? "You can't take it with you" as they say.

I suspect that this figure is indeed largely explained by the fact that in most cases the houses and bank accounts of the first to die of married couples will be held as joint tenancies and won’t go through probate.

So 65% of people may be homeowners (not evenly distributed by age of course), but up to half of them, maybe a third?, will be bypassing probate. Subtract the number of people who have to sell their house for care (fewer than you’d think from MN, but still a noticeable number) and people who’ve traded it in for equity release and I can see how you’d get to that 60/40 split.

This article is very misleading and is not citing the facts behind its conclusions. It also does not accord with HMRC's own detailed statistics which are published annually.

Fake News in every respect!

"Sixty per cent of people die leaving less than £5,000, according to new research from the London School of Economics and Political Science. It is a situation that has not changed in relative terms since 1950, despite declining wealth inequality and the rise of the middle class, the paper discovered.

Neil Cummins, Associate Professor in LSE’s Department of Economic History, analysed 60 million English death and probate records from 1892-2016."

It depends how much the other 40 per cent leave doesn't it?

The LSE report doesn’t say “60% of people leave less than £5,000” though, it says “60% of estates don’t go through probate”. The probate threshold is £5,000 but that excludes houses held as joint tenancies, joint bank accounts, and most life insurance policies. There’s bound to be a fair number of married people who die with practically all assets held jointly with their spouse.

Plenty die with debts, it's an average.

It doesn’t feel right to me.

Maybe on current accounts but, what about property, pension pots, trusts, LT investments and share portfolios?

Lots of homeless people
Lots of suicides
Lots of elderly people who have had to sell off any assets
Or long term sick or disabled
Those in social housing or rentals
It's not impossible to fathom why

If I died right now I would leave nothing but debts and poetry

Good luck living on that kids

My parents never bought a house, DF did after they divorced. So DM left next to nothing and DF left a small house that wasn’t worth much.

ILs, 4 bed detached very close to London. MIL has just passed away, no idea yet what her Will shows. He retired early and has lived another 35 years, so far. No idea how much he will leave when the time comes.

Pension pots and trusts wouldn’t go through probate either.

About 70% of adults pay no tax so sounds about right

Doesn't surprise me. I thought rental market was more common than owned homes now? That combined with so many people on benefits or living using credit every month.

I know if I died tomorrow I'd leave more debt than ready cash or assets

I don't think I have ever actually had £5000 in my bank account. I think my highest was almost £4000 when I got some redundancy money. I would love to have £5000. I could do a lot with that.

And thinking about it, when my dad died he had about 6000 In the bank in his own account.everything else was jointly owned with mum.

About 70% of adults pay no tax so sounds about right

That doesn't sound right. Also, you don't have to contribute towards care costs if your property is shared with a partner or you have less than about £23k in assets so its not necessarily care costs making people die with less than £5k.

It would be interesting to let Radio 4 More or Less check out the accuracy of this claim.

I wonder how much of that is due to care home costs

My 80 yearold mum had just over 5k in saving and a 220K house.

If it excludes any house owned, I am surprised it is only 60%.