Wise investment required to live like a millionaire on a million

Tuesday, October 18, 2005

A million pounds is not what it used to be, according to a report from the private bank Coutts.

An increase in housing prices as well as a fall in interest rates means that £1 million pounds is not enough money for you to live like a millionaire anymore.

House costs have leaped by 575 per cent since 1980, whereas interest rates have fallen from 16 per cent to just 4.5 per cent.

"One million pounds is obviously still a sizeable amount of money, which, if invested correctly, can afford a high standard of living and provide financial security in later life," said Sarah Deaves, chief executive of Coutts.

"However, while 25 years ago £1million would have been more than enough to comfortably live the 'millionaire’s lifestyle' a few times over, today it will only afford a small portion of the trappings."

This highlights the needing for sensible saving and investments even with what is generally still considered enough money to retire from work with - two thirds of people said they would do just that if they won £1 million.

Recently, a host of new investment bonds have been introduced offering varying rates meaning someone with money to invest can capture a good deal.