The £85m time warp

By MICHAEL CLARKE
Updated:

 

A millionaire at the beginning of the twentieth century would need the equivalent of over £85m today to uphold a similar lifestyle.

Due to the impact of inflation, somebody with a net worth of £11,700 in 1907 would have enough in the bank to live the life of today's millionaire.

Looking over the past fifty years, an individual would need £17.2 in today's money to fund the same way of life.

According to the Clerical Medical, somebody living today would need £2m to have the same spending power as a yuppie millionaire in 1987.

And millionaire's today had better invest their money wisely because in 2017 their money will be worth just £820,300 and will have halved to £452,900.

Rob Devey, managing director of Clerical Medical, said: 'There is no doubt that £1m is still a lot of money although inflation has substantially eroded its purchasing power over the past 100 years.

'The value of £1m will be reduced significantly further over the next 50 years, even if inflation is kept firmly under control. Whilst £1m is no longer enough to fund a lavish lifestyle, it can still go a long way with careful financial planning.'

Clerical Medical based its research on an annual inflation rate of 2% - the same as the Bank of England's long-term target. However, inflation has been significantly above that in recent months, hitting 3% in December and 2.7% last month.

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