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The linked PDF has a lot more content: https://www.resolutionfoundation.org/app/uploads/2023/07/Peaked-interest.pdf https://www.resolutionfoundation.org/app/upl

The linked PDF has a lot more content: https://www.resolutionfoundation.org/app/uploads/2023/07/Peaked-interest.pdf https://www.resolutionfoundation.org/app/uploads/2023/07/Pea... I'm determined to understand the full context of this claim: "FIGURE 22: The typical household needs to amass far less wealth to achieve the same standard of living in a higher-rates environment, but far more if rates drop"

Ilverin 3y ago
That's basic finance. Higher interest rates are about loaners (also known as savers) getting paid more, and borrowers paying that. If you are amassing wealth (rather than amassing debt), then you are a saver and can loan your money to be paid an interest rate. (Note: this is about real interest rates not nominal interest rates)
landemva 3y ago
Savers get higher income from interest, so less likely to spend savings and instead spend interest income.
- ghaff 3y ago
  For someone near retirement who owns their home, inflation somewhat offsets interest income but they're probably not spending a huge amount in general--and higher interest rates mean they can have pretty low-risk investments (which they want a fair bit of at that point) returning 5% or so at the moment.
nly 3y ago
It's complete rubbish. It only makes sense if you're retiring today and buying an annuity product. The overall negative effect of people deferring pension contributions (401K equivalent to US readers) due to the higher cost of living far outweighs anything else.