Financial assets held by households
include cash, shares, pension funds, etc., and form an important part of overall wealth
and an important source of revenue; either through their sale or refinancing, via
pensions, or other property income via interest and dividends say. Data on financial
assets held by households play an important role in economic analyses, such as studies of
asset bubbles and analyses of welfare.
Financial assets held by
households include: currency and deposits; securities other than shares; loans; shares
and other equity; net equity of households in life insurance reserves; net equity of
households in pension funds; prepayments of premiums and reserves against outstanding
claims; and other accounts receivable.
Most of the asset classes above are
self-explanatory but in the following cases a few additional elaborations are helpful.
Life insurance reserves and pension
funds are typically managed by institutions outside of the household sector but the
reserves and funds are considered the property of the household sector.
Non-life insurance is treated
differently however and only the prepayment of premiums made by households and outstanding
claims payable to households are considered as financial assets of the households
Other accounts receivable typically
reflect payments due to households not included elsewhere, such as tax reimbursements,
outstanding wages and salaries and often, depending on national practice, interest
accruing on deposits and loans that is not capitalised in the underlying asset.
In practice the bulk of financial
assets held by households reflects currency and deposits, securities, shares and equity
and net equity in life insurance reserves and pension funds.
An important additional item relating
to household financial assets, concerns contingencies, in particular, entitlements of
households to pensions from unfunded schemes, such as pay as you go social security
schemes. In these cases no actual financial reserves hypothecated to a pension fund exist
and, so, no financial assets are recorded to the households sector (see Annex for
changes in the 2008 SNA).
Comparability is good but data
are not always available for all asset-types or not separately identifiable. As such
considerable care is needed when making cross country comparisons, not only of totals,
but especially of sub-totals.
The estimates shown in the tables
and charts that follow present statistics on a non-consolidated basis (except for
Australia and Israel).