Are you rich? How much income, money, assets and pensions do you need to be rich?

If you have £90,000 in the bank, a mortgage-free house worth £310,000-plus and a pension pot of £627,000, you can consider yourself rich, new research shows.

That’s what the wealthiest individuals with the top 10 percent of assets in the country tend to own, and they are most likely to enjoy this wealth in their early 60s, close to retirement.

Meanwhile, a snapshot of the top 20 per cent of households by income shows they reach that benchmark level at a younger age and have an average after-tax income of around £78,400 a year, according to the Hargreaves Lansdown research.

However, their wealth is lower as they hold around £35,800 in cash, of which almost £10,000 is in their current accounts, have an average of £39,500 in stocks and shares Isas, and have built up a total of around £294,000 in pensions to date. .

Households at that income level typically have around £840 left at the end of the month and manage to save just over £10,000 a year.

High-income families are still building wealth and tend to be younger than the older, asset-rich groups, says Sarah Coles, head of personal finance at Hargreaves Lansdown.

She said the figures highlight how the question of who counts as rich in Britain has different answers depending on how you define it: total wealth or high income?

The issue has been thrust into the spotlight, with Prime Minister Keir Starmer warning that the autumn budget will target those with the ‘broadest shoulders’, but Labor’s manifesto pledged not to increase income tax rates.

Coles says: ‘If you were to qualify as rich as someone who has a lot of assets, this tends to peak at 60-64, when on average we have £380,100 in wealth.

“It tends to start low, build up slowly, and then pick up the pace as we hit 55.” Then we spend money gradually as we retire, so that the next richest group is between 65 and 74 years old.”

Coles notes that people aged 60 to 64 have nine times as much wealth as people aged 30 to 34.

Hargreaves used official data plus his own Saving and Resilience Barometer, compiled in collaboration with forecasting firm Oxford Economics, to reach his conclusions about who counts as rich.

The barometer is based on data from the Office for National Statistics’ Wealth and Asset survey – which draws its information from 10,000 households – plus other data from official sources.

Are you rich enough to be included in the budget?

The government may think that the higher earners described above have wiggle room in their budgets to pay more tax, says Sarah Coles of Hargreaves.

But while this group may be comfortable, hitting higher wealth taxes won’t be as fruitful as those who have already built wealth, she thinks.

The richest group in terms of assets is over 60 years old.

Coles says: ‘If you are in this position and have carefully built up assets to fund your retirement, the idea of ​​losing this through tax at an age when you have fewer opportunities to rebuild wealth could be particularly worrying, especially given rising social security. healthcare costs.

‘However, the Government will be aware of this, so even though it appears to be a tax target, they should consider the risk that damaging the wealth of those who have recently retired could mean falling short as they get older, and have to fall back on the state.

“It means that instead of targeting wealthy groups of people, the government could simply take a bigger share from everyone as their wealth grows.”

This could mean the government decides to increase the capital gains tax rate, although there would then be a risk of people holding on to their gains until they die, when CGT is reset to zero under current rules, Coles explains.

The government could therefore change these rules so that capital gains tax is not reset to zero and your estate may have to pay it on top of any inheritance tax.

‘They may also decide that inheritance is a useful target because it is not money that individuals will rely on later in life.

‘While it will not impact those who have built up assets throughout their lives, it will impact their families, who may have to rely on an inheritance for important life milestones such as buying a house or retiring . It could mess up people’s plans.”

How to protect your assets against future changes

Sarah Coles explains your options in different scenarios.

You’re sitting on capital gains

– Take advantage of your annual capital gains tax allowance as you go – it currently stands at £3,000 per year.

– Sell, wait 30 days and buy the same assets, sell and buy different assets immediately, or use the Bed & Isa process to sell and buy the same assets immediately – protecting them from capital

– You can offset losses from the same year against your profits when calculating how much tax you owe. You can also take them with you for a year. You must report losses when you make them so that you can carry them forward.

– Consider a stocks and shares Isa for your investments as any growth is free from both capital gains tax and dividend tax.

> Essential guide: how capital gains tax works

Your estate may be liable for inheritance tax

– Give gifts within your £3,000 annual giving allowance.

– Give away larger amounts and these will fall outside your estate after seven years.

– Give away excess income from your regular monthly income if you can afford it after paying your usual living expenses.

– Pay into Junior Isas for children in your life who are under 18.

> Essential Guide: 10 Ways to Legally Avoid Inheritance Taxes

You expect to receive an inheritance

– Make sure essential expenses are covered during your retirement, regardless of whether you receive an inheritance or not. This can arise from a combination of state pension, company and personal pensions, but also from other investments.

– If your retirement savings are falling short, have a robust plan B that you are willing to use, such as downsizing your home, working longer hours or working part-time in retirement.

– If an inheritance is likely to play a role in your retirement income, be as sure as you can that you will actually get one by talking to your loved ones about it. You may find that they like to give lifetime gifts, which could be more tax efficient.

– Prepare for a possible inheritance to help pay for extras to make life more comfortable or give you the lifestyle you want in retirement.