Note: Real returns to equities and bonds are inclusive of income (dividends and interest) and capital gains net of inflation. Equities returns until 1963 are based on the largest 30 companies on the London Stock Exchange and since 1964 are based on the FTSE All-Share Index. Return to bonds is based on 15 and 20-year government bonds. Real house price growth is the annual change in the Nationwide house price index, net of inflation. Average annual returns over working life are the geometric mean of the annual real returns between ages 22 and 65 (or 2020, if earlier).
Source: Figure 2.4 from ‘A blueprint for a better tax treatment of pensions’, Adam et al (2023). Returns to equities and bonds are from the Jordà et al. (2019) Macrohistory database (accessed January 2023). House price growth is from Nationwide and deflated by CPI (and before 1989 an adjusted version of the RPI).
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