I guessed that I was better off than 91% of people. The calculator agrees precisely, which was a little odd.
It's worth noting that labour income is less unequally distributed than either capital income or capital.
A measure of wealth that basically looks at income and only tangentially captures capital by looking at blended income from labour and capital and at council tax (payable on property regardless of whether you own it and if so how much equity you have in it) is likely to overstate the relative position of someone whose only significant asset is a mortgaged house.
You're going to lose track of the (very large) differentials of wealth within the top 10-15% very quickly.
We'd be better off trying to work out how nice we are to other people and how much we give back to our communities... and willy-waving over that instead.
I think what's being illustrated here is how weirdly skewed the wealth is in this country. Because all the money is so hugely weighted towards the top 5% or so it doesn't take a lot to move you up quite a substantial amount. Strip out those top level outliers and money is actually quite evenly distributed!
I guessed roughly right - around 70%, but until last year myself and my wife were down around 20%. We still live in a one-bed flat next to a motorway and drive the same beat up Mondeo (the exhaust fell off yesterday :/ ) - it certainly doesn't feel like we've just vaulted half of the entire country in terms of wealth. But that's partly because everyone else is skint too.
It certainly doesn't help that this country has the kind of polarised class debate that it does these days. We all squabble about who is or isn't 'wealthy' while the top 1% quietly squirrel their assets away in tax havens hoping we're all too distracted to notice.
You do know that these things are just random number generators, and that 84% of statistics on the internet are totally made up, don't you.
Simplistic? yes. Random? no. Accurate? Dunno - watch the show.
Maybe it'll help some people understand that as much as a struggle things seem for them there are those who are worse off - and those need benefits we throw at them.
Because all the money is so hugely weighted towards the top 5% or so
I'd say the real huge weighting is all in the last 1 percent. We have a very good income, enough to comfortably put us in the top 10% of that simplistic scale, but our lifestyle is still fairly normal - certainly nothing like the true rich and famous. If you look at that scale you only need an income of about £200K net to get in the last 1 percent, which although a nice income well above what most people earn, it's still nothing compared to the real elite earners.
These "calculator" things are brilliant - enough built in inaccuracy to guarantee pages of debate.
Re: property. If it really is a "choice" issue then you have to apply that logic universally.
It's not assets that should count BTW, it's net assets.
If you look at that scale you only need an income of about £200K net to get in the last 1 percent, which although a nice income well above what most people earn, it's still nothing compared to the real elite earners.
True - it's shitloads but it's still not oligarch money.
I found this video quite fascinating if anyone's got a spare 5 minutes - shows graphs that demonstrate what (American) people think the ideal income distribution weighting would be, what they think it actually is, and then what it is in reality. It's kind of scary! Probably not massively far off the situation in the UK, too.
So that's it.... how much do you make, what your council tax is and how many in the house? Right.
Not too daft, council tax being proportional to property value and specific to the area. A person paying that in Teesside paying that probably has a similar lifestyle to someone paying that in London (top 2% or whatever). If I was paying £200+ a month council tax you could proabbly guess from that alone that I was minted, whether I owned the house or not I either have the asset or a high income (or both?).
Then income/person tells you how much money you've got relative to what you need (need being a 2 bed flat in the wrong postcode and the kids shring a room, the big mortgage/rent is your individual decision).
spoon - Try changing your council tax in the calculator. It has very little effect on the results.
mudshark - Member
Seems to me capital is ignored but relevant - those who have had a property for a few years are in a far stronger financial position than those without.
Property perhaps if a net asset, but capital not necessarily so. Gov policy is to effectively steal from those with capital under the euphemism "financial repression." Terrible time to have excess capital with states deliberately mis-pricing potential returns.
Do people think of assets or income when considering how rich someone might be? Even if the assets aren't generating a great return you could live just by burning through it - try not to end up like a bankrupt footballer though....
Ask a farmer!?!
I would have thought 'net worth' is probably the best indicator of how rich someone is at any specific point in time. Although this doesn't take into account potential future wealth. Obviously someone with a newly acquired seriously high income (say a 17 year old Premiership footballer) would not score as highly (at that point in time) as a retired professional with a small property portfolio, no mortgage and decent life savings.
tbh that's fair enough, you choose to have a larger commitment than someone else. It's basically trying to figure our you disposable imcome.gobuchul - Member
Pretty lame.Puts me in the top 10%.
However, doesn't account for the ridiculous mortgage I have to pay each month.
how much you spend on your mortgage is your choice.
incidently, puts me a 48%.
odd that it is interested in what you pay for council tax but dosn't ask about any savings, investments or property equity which I am sure for many people is where their wealth is.
spoon - Try changing your council tax in the calculator. It has very little effect on the results.
I haven't got time for that, I've got money to spend. 😛
Maybe it varies in how much effect it has depending on the other two answers? More kids would cancel out a bigger council tax bill as it would incicate you have a more 'average' wealth as your requirments (more bedrooms) are being met, whereas a single person with a big house is more 'wealthy' as he is living in excess of his requirments, therefore is assumed to have a large disposable income.
I'm just supposing that the formula looks something like:
How well off are you relative to your area (what's your C.tax) + How well off are you relative to your needs (C.tax/dependants) + how much money do you have (income/adults in house) = Scrooge score (TM)
Which is then ranked to give you your %.
how much you spend on your mortgage is your choice.
To a certain extent yes.
However, as I had to move to the South East for work and lost a load of equity when I did so, I had to take a large mortgage to get anything decent to live in. Nothing extravagant, just a 3 bed bungalow that needed doing up.
My car is 10 year old and the Mrs's is 11 year old. No intention of changing them sooner either.
odd that it is interested in what you pay for council tax but dosn't ask about any savings, investments or property equity which I am sure for many people is where their wealth is.
It's assigning you a rough number based on 3 easy to know bits of information, it's not an accountant! If you really drilled down into it then my main car and bieks are a liability (well, a rapidly depreciating asset at any rate), my boat and 2nd car are "more fun than a savings account".
I'm never convinced that property equity is wealth. You can never access it unless you significantly downsize. It's only money if it's a 2nd house making a return via rent. For the most part it's a liability, the market could theoreticaly crash to zero leaving you with a huge mortgage and no equity.
What a ridiculously poor "calculator" to not include property costs, worthless.
how much you spend on your mortgage is your choice.
But that's not the point, its the cost of accommodation which matters and that's highly variable be that rent or mortgage.
@spoon - no the council tax is only used to help work out your disposable income. If you put a higher value in it thinks you are less rich, not more rich as you supposed. So it's not used to define how big your house is or the area you live in.
still entiely up to you whether you decide to spend 500 quid a month or 4000 a month!jambalaya - Member
What a ridiculously poor "calculator" to not include property costs, worthless.how much you spend on your mortgage is your choice.
But that's not the point, its the cost of accommodation which matters and that's highly variable be that rent or mortgage.
People with money trying to claim they are not well off make me laugh! 😆
It should have spaces for debts and assets and that about it. It's irrelevant what you spend your money on.
It's basically a disposable income calculator - but presuming that your mortgage payments are part of your disposable income i.e. a personal choice. Your assets, savings, debts are simply not included.
Damn! You lot are rich! 80% are richer than me! 😯
@spoon - no the council tax is only used to help work out your disposable income. If you put a higher value in it thinks you are less rich, not more rich as you supposed. So it's not used to define how big your house is or the area you live in.
In that case:
How well off are you relative to your area (what's your C.tax) + How well off are you relative to your needs (C.tax/dependants) + how much money do you have (income/adults in house) + (income-C.tax) = Revised Scrooge score (TM)
Either way, council tax is probably correlated to a lot of things (mortgage or rent, utility bills). I am surprised that it works the oposite way arround though. I still think you could correlate council tax failry well agaisnt wealth.
Guessed correctly at 35% poorer.
Hopefully that will be higher after tomorrow! (Job interview 😀 😕 🙁 )
I am surprised that it works the oposite way arround though. I still think you could correlate council tax failry well agaisnt wealth.
I'm not that surprised, I thought it would be just trying to gauge your unavoidable outgoings as it appears to do. To correlate against your wealth, would it not need to know your postcode too? I'm not sure how it could possibly know how well off I am relative to my area if it doesn't know what area I live in?
It was 1% out.. Not bad really.
Just clarifies that kids are bloody costly. I did mine with and without and it made a difference of nearly 20%. Employer pension contributions make a difference of circa 5% too. I actually think it looks like a pretty good ready reckoner. I imagine it's based on a fair amount of statistical information.
Did anyone do the similar thing that was on the BBC a few years ago looking at it in a world rather than UK context? That was quite an eye opener.
(For risk of misinterpretation, I would obviously rate the value of my offspring at more than a 20% difference in comparable income standing. I know what this place can be like sometimes).
I'm not sure how it could possibly know how well off I am relative to my area if it doesn't know what area I live in?
What makes you think they don't know where you are? http://www.geoip.co.uk/
(I suspect they don't, as it's clearly not that clever, but they probably could make a reasonable guess at region using your IP address.)
By the way, clicking the "how does this work?" link takes you to a page explaining [url= http://www.channel4.com/programmes/how-rich-are-you/articles/all/methodology-behind-the-app ]the methodology of the quiz[/url].
I was tempted to watch the programme, but it's presented by Richard Bacon so I think I'll give it a miss.
F*cking B*stard* kids!
*not literally - at least not as far as I know.
I still think you could correlate council tax failry well agaisnt wealth.
Doesn't Kensington and Chelsea have one of the lowest council tax rates in the country ?
still entiely up to you whether you decide to spend 500 quid a month or 4000 a month!
People with money trying to claim they are not well off make me laugh!
Well it's not up to you if a 2 bedroomed place costs £750 or £4000 a month to rent depending where you happen to live ?
I assume that second remark was directed at me, I certainly don't claim to be "not well off" FWIW, have never done that on here for certain.
Doesn't Kensington and Chelsea have one of the lowest council tax rates in the country ?
True, but broadly a nice house will still cost more than a crap one in council tax.
IME people chose a house that reflects their means. Compare Teesside and Chelsea at opposite ends of the spectrum. £300k buys you a bedsit (or probably nothing) in Chelsea, in Teesside it buys a 6 be farmhouse and some land. That doesnt mean the 'poor' person in Teesside buys a huge mansion, they still buy a small terranced house for £40k, and the rich person in Chelsea doesn't buy the bedsit, they buy a nice townhouse for £1.5million.
However the middle clasess on Teesside on average I reckon drove nicer cars (and probably spent money on other less visible things too). The works car park was all Audi, BMW and generaly 'new'. The works car park in Reading is a mix of 6+ year old Fords.
So theres no more money at the end of the month, it's just aportioned differenlty.
Well it's not up to you if a 2 bedroomed place costs £750 or £4000 a month to rent depending where you happen to live ?
No but there's still an element of choice. You could have found a job elsewhere, or lived in a worse postcode. Local to me Wokingham is one of the most expensive places outside the M25, but 4 miles down the road is Whitley, which is about half the price. You're still better off than the proportion of people earning less and living in the same area. I'd not pretend I'm somehow poorer than the person who lives in Whitley (I am less likley to get stabbed or be found dead in the Canal though).
Doesn't Kensington and Chelsea have one of the lowest council tax rates in the country ?
Does that have anything to do with the fact that most properties are in the top band?
@mudshark, a good question. I thought a big part was that there is high business rate income and relatively low expenses on things like social programmes
Yes that makes sense.
Any quiz that tries to say if you are rich or poor based on three questions is going to give nonsense results. If your income is investment based then you would have to have over a million invested to get into the top half of the population based on that quiz.
It asks for income after tax, so I don't think things like employer pension contributions should be included, but voluntary employee contributions probably should, but calculate the amount after tax
Kids make a big difference to where you sit on the rich poor spectrum, mine took me 8%nearer to the poor end.
[i]I'm never convinced that property equity is wealth.[/i]
Eh? It is when you've not a mortgage.
We were well down where I reckon we should be; but then it doesn't capture that we've no mortgage/rent and 2 out of 3 kids working. etc
Property equity is an important driver of consumption though - and this is the biggest part of UK aggregate demand. Sadly, we over rely on this in the UK as the Tories have just shown us.
Nice chart in the Economist on hourly wage percentiles:
[img] 
[/img]
http://www.economist.com/blogs/blighty/2014/11/living-wage
Just watched the first part.
Vive la revolution!
