Money may not be able to buy happiness, but a new study suggests it does buy health. Researchers in the US discovered that people who lost at least 75 per cent of their nest eggs in middle or older age, were 50 per cent more likely to die in the next 20 years.

The researchers say the financial loss takes a heavy toll on physical and mental health.

“We found losing your life-savings has a profound effect on person’s long-term health,” said lead author Dr Lindsay Pool, a research assistant professor of preventive medicine at Northwestern University Feinberg School of Medicine.

“It’s a very pervasive issue. It wasn’t just a few individuals but more than 25 percent of Americans had a wealth shock over the 20 years of the study.”

The study, which is published in the journal Jama, is the first to look at the long-term effects of a large financial loss.

"Our findings offer new evidence for a potentially important social determinant of health that so far has not been recognized: sudden loss of wealth in late middle or older age,” said senior author Carlos Mendes de Leon, professor of epidemiology and global public health at University of Michigan’s School of Public Health.