Global Debt Levels

Increasing Healthcare Costs

Forthcoming Pension Crisis

As a manager of specialist UK real estate investments funds why are we so concerned about what we refer to as the 3 elephants in the room?

What has this to do with property investment?

 

We believe that the current and increasing levels of debt in the UK and globally, are unsustainable and are hindering a genuine recovery.  As long as this continues, and the problem not addressed head on, then we believe that growth and returns on investment, will suffer.  As government debt yields reduce further, then so will yields on other investment types, including property.  At the same time, there is the real threat that QE policies may eventually lead to an inflationary surge, making us cautious in our approach.  Our strategy of investing in RPI Property, provides a hedge against a sudden and long term inflationary environment.

We live in ageing population with the cost to individuals and governments, of providing suitable levels of care, are set to soar.  We fear that this may add further the high levels of debt already in existence.  Many are unaware, or chose to ignore this particular problem, leaving it for another day.

Finally, as defined benefit pension schemes become a thing of the past and we continue as we have done since 2008 with low returns, then the pension pots available will shrink, placing a greater demand on the public purse, further impacting on recovery.

It is worthwhile looking at these 3 elephants in more detail.

 

Global Debt Levels

The first and largest elephant in the room.

 

Not only is the level of debt rising, but interest charges are accumulating at an alarming rate.

 

The clocks are ticking.

If I owe you a pound, I have a problem; but if I owe you a million, the problem is yours.

John Maynard Keynes

%

Debt as % of GDP

£ Debt per Citizen

£ Interest per Second

Interest per Year £'billion

GDP £'billion

Population (million's)

Global debt Levels

Click on the links below to view a live debt level clock for the UK and globally.

http://www.nationaldebtclock.co.uk/

http://www.nationaldebtclocks.org/

Escalating Healthcare Costs

Healthcare costs continue to rise not only in the NHS, but through social costs of an ageing population.

With constraints on budgets due to high debt levels and an unwillingness to increase the tax burden, the sustainability of healthcare is being put under constant pressure.

We refer you to some detailed reports on the future of healthcare costs including from think tanks on both ends of the spectrum.

A hospital bed is a parked taxi with the meter running.

 

Groucho Marx

Overview of the UK population : August 2019

In mid-2018, the population of the UK reached an estimated 66.4 million. In 50 years’ time, there is projected to be an additional 8.2 million people aged 65 years and over in the UK – a population roughly the size of present-day London.  After decades of improvement to life expectancy, the latest figures show a slowdown in improvement – life expectancy at birth remained at 79.2 years for males and 82.9 years for females in 2015 to 2017.

ONS Report August 2018

 

Ageing Populations Will Challenge Healthcare Systems All Over The World

Demographic change is a defining issue of our time. As the worldwide population ages, the healthcare systems of every country will face significant challenges to meet the needs of an ageing population. This article is the first in a series that will explore how nations are coping with demographic change

Aging Populations Will Challenge Healthcare Systems All Over The World

Identifying options for funding the NHS and social care in the UK: international evidence

According to this report, Britain’s welfare system is overcomplicated, wasteful and counterproductive. In Free Market Welfare, Michael Story makes the case for merging most working-age benefits into a Negative Income Tax – a single, tapered payment that tops up the wages of the working poor and guarantees that work always pays.

Hot on the heels of growing health costs, with the end of final salary pensions for the majority of the UK, the ageing population and declining working population, added to the problems associated with debt and the constraints on tax raising, many are oblivious to the pension time bomb ticking.

The stroll into the sunset may not be quite as comfortable as hoped as the following articles highlight.

It does not matter how slowly you go so long as you do not stop.

Confucius

This Is Money

Work ’til you drop? Young workers could have to slog non-stop to AGE 77 for the same pension as the last generation.

Work ’til you drop

Is a HUGE pension crisis heading to the UK?

Samuel Jefferies looks in depth at the history of pensions in the UK and asks?

Is a HUGE pension crisis heading to the UK?