Are you a millionaire?

The Telegraph is running a story today with the headline: 'One in five university graduates becomes a millionaire'. How intriguing. The sub is: "More than two million degree-holders have a net worth of £1 m or more as new statistics reveal the education gap between rich and poor". This apparently stunning factoid is based on a report by ONS which I've not read, so I can't venture any criticisms of the source material. 

But...hang on a moment read further in the Telegraph report, down to the line that says: "The figures, which do not account for household debts such as mortgages, also showed that...". Play that by me again...So in fact a large proportion of those two million degree holders with net worth of £1 m or more won't actually have a net worth of £1 m at all. Possessing assets worth a million is, er,  not the same as having a net worth of £1 m. You'd think the Telegraph would get that right wouldn't you?

And, then there are pensions. I've not read the original data source, but I'll make an educated guess that pension wealth has been imputed. This is not a criticism, it is very hard to get accurate individual level information about pension wealth. What your pension is actually worth to you right now depends on assumptions about the discount rate to apply, how long you are going to live and for an increasing proportion of people the state of the stock-market at the point they retire. I'm sure ONS have made sensible guesses about these things but they will just be guesses no matter how fancy the methodology.

Combine all this with the arbitrariness of the £1 m threshold and the whole story disappears in a puff of smoke.