One for Ken perhaps

As the one person who reads here occasionally who also knows their way around the economic statistics.

So, UK capital share is about 20% of GP. Good part of that is depreciation etc. Actual payouts and returns to capital are more like about 10%. Well, an accurate figure there would be nice.

But what portion of that capital return, rather than capital share, is returns to pensions savings? There’s a trillion or two in pension pots, isn’t there? Meaning that we are getting to some appreciable percentage of GDP in those annual returns to them, no?

4 comments on “One for Ken perhaps

  1. I don’t pretend to Ken’s expertise on economic data but the returns on pension savings aren’t quite the same as the the value added by the capital invested by pension funds. A lot of the return, positive or negative, comes from the rise or fall in the market price of the assets in which they are invested. A second point is that a lot of pension money is invested outside the UK in order to benefit from the higher returns on capital permitted by countries that want their economies to grow while some of the UK returns on capital accrue to foreign pension funds that have invested in UK companies – and rather more to those that have invested in the foreign parent companies of UK subsidiaries – more of the profit from selling a Mini Cooper goes to German pension funds than UK ones.

  2. Hi Tim

    The figure you want to exclude depreciation is the capital share of Net national Income. Very roughly you can subtract the depreciation or consumption of capital stock:

    https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/bulletins/capitalstocksconsumptionoffixedcapital/2018

    capital share is 20% UK GDP is £2 trillion so £400 billion. £244 billion of capital consumption means that on a net basis capital return is £150 billion.

    UK pension assets are £3 trillion. But not all invested here.

    https://www.willistowerswatson.com/-/media/WTW/Images/Press/2018/01/Global-Pension-Asset-Study-2018-Japan.pdf
    Page 22.

    Note also that some businesses are funded by sources other than “pensions”. Not sure I’d want to tie these numbers together.

    Also the capital share is PNFC
    https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/adhocs/006610labourshareofgdpandprivatenonfinancialcorporationgrossoperatingsurpluscorporateprofitabilitycurrentpricesquarter1jantomar1997toquarter3julytosept2016

    In the US there is an issue over the allocation of self employment income to capital and labour – I’m not that familiar with the UK, but I suspect there’s more to be looked at.

  3. “As the one person who reads here occasionally who also knows their way around the economic statistics.”

    Why Ken? Richard (Murphy) surely?

  4. @BraveFart

    Arf arf!

    And of course Murphynomics has the advantage that if you don’t understand the numbers, you can just make up some new ones.

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