Assets, savings and wealth, and poverty

Classic economic theory – the ‘life-cycle model’ – suggests that savings help smooth consumption and provide a buffer against economic shocks over the life course. More recently the theory of asset-based welfare has been developed as a pathway to poverty alleviation. This theory also suggests that owning assets changes the way people think. They become more responsible and forward looking. This is called an ‘asset effect’: it is the extent to which owning an asset provides additional benefits or opportunities over and above their pure financial value. In this evidence review savings, assets and wealth are defined, international asset-based policy initiatives are reviewed and the contributions of these policies in alleviating poverty are evaluated. (University of Bristol, Personal Finance Research Centre).

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