We are all getting poorer, it is official. Or at least that is what the Financial Conduct Authority has said.
Batten down the hatches, spending nothing, prepare for a horrible old age.
The FCA report into the generational divide should be essential reading for any adviser, because it actually manages to lay bare the challenges of financial planning for the next 30 years.
In short, what the FCA discovered was that working age people today had less total wealth than those of the same age a decade earlier.
Not only that, but property wealth starts accumulating four years later.
These are important issues because what they tell us is that there is a middle band of Generation X – lumbered between the baby boomers and millennials – who have some very real problems.
We will come back to them in a tick.
The arguments over the wealth of the baby boomers have been well rehearsed before, but what is significant about this generation, and what the FCA points out, is that they have not quite got their head round what to do with accumulated assets and how to ensure they bring them a greater standard of living later in life.
Coming just days after the Centre for Policy Studies published its proposals to reform social care by levying a 1 per cent tax on those aged over 50, this is important.
I suspect that what the FCA really means by accumulated wealth is property: it is the most toxic subject of all.
On average, a house bought 25 years ago for £100,000 is now worth £420,000 – that is double what it would have grown in real terms.
And yet, what to do with this asset remains a conundrum.
You only need look at the equity release figures for the start of the year to see how us Britons have got our head round the idea of using property wealth to splash out.
But to pay for long-term care? No, thank you.
As an aside, I once described this asset price growth as "unearned". Try it yourself, and see what reaction you get from those who have benefited the most.
Planning for long-term care remains a challenge for the baby boomer, and they are going to have to started accepting that housing wealth is not untouchable.
Choice, when it comes to social care, is everything – but it does cost money.
What, though, are we to make of Generation X, where the conversation is not what to do with accumulated wealth, but how to build it up in the first place?
They are starting families later and they have relatives living longer who may need care. If they are to inherit a property, it may not come until they too are in retirement.
On top of this, most will have missed out on final salary pensions, and entered the workforce too many years ago to have benefited from auto-enrolment.
To top it all, their own children cannot afford to buy a house and so will be living under their roof for years to come.
If that is not the squeezed middle, then I do not know what is. They really need some help planning for the future.
On top of this, the baby boomers mostly benefited from substantial tax relief when they bought their property – either through mortgage interest relief at source if it was a residential purchase, or through income tax relief it it was a buy-to-let.
Miras, on its own, is far more of a perk than any of the bonuses offered through Help-to-Buy, which, in effect, simply help builders and banks.
This shows the power that tax breaks have in incentivising behaviour, and is one that future governments should remember if they want us all to save for social care in the future.
Woodford makes U-turn
So after all the protestations, we have a U-turn from Neil Woodford.
He has announced that he will whittle down the unquoted stocks in his equity income portfolio.
Thank goodness for that. Maybe the fund can go back to being what investors had hoped it would be.
The interesting thing about the news was the role Hargreaves Lansdown played in the decision: it seemed that they had held talks behind the scenes with Mr Woodford.
That should be no surprise, given that we all know the tight bond between these two institutions.
But it does raise questions about who is calling the shots here – and if Hargreaves Lansdown was only echoing the concerns of its investors, why did it not do this much earlier?
Think how much heartache could have been saved if Hargreaves Lansdown too had not stuck to its guns too stubbornly.
Data protection
I was in the US last week and using my new Monzo bank account for the first time; I opened it specifically for its free foreign spending.
Its app is very fancy and lets you see in dollars and pounds what you have spent by the minute.
But one night, after I paid in a restaurant, I also received an email with a copy of the bill.
Paying with the card had obviously sent my email details to the restaurant to allow them to do this.
That is helpful, but to be honest, it is an awful lot creepy too.
James Coney is money editor of The Sunday Times
