Richest households enjoy the lion’s share of the UK’s big wealth boom

The UK’s total wealth grew by 13 per cent to reach record £14.6 trillion in the two years to 2016-18, with wealth among the richest ten per cent households increasing almost four times faster than those of the poorest households (11 per cent vs 3 per cent), the Resolution Foundation said today (Thursday) in response to the latest ONS Wealth and Assets Survey.

The latest ONS data shows that the UK’s wealth is both huge, and hugely unequal. Wealth inequality (as measured by the Gini coefficient) is almost twice as high as income inequality (0.63 vs 0.34) and, having fallen for most of the 20^th Century, has increased slightly over the past decade. Lower home ownership rates have increased property wealth inequality, which has partially been offset by auto-enrolment reducing pension wealth inequality.

The data also highlights the extent to which wealth is concentrated in rich households. 45 per cent of national wealth is held by the richest ten per cent of households, while the poorest ten per cent hold just 2 per cent.

Regional wealth gaps have also growth as wealth has increased fastest in the South East. Typical wealth in the South East is, at £445,900, more than twice as high as the North East (£172,900). The Foundation notes that despite the UK’s record level of wealth, typical wealth in the North East and East Midlands was still below its pre-crisis level in 2016-18.

The Foundation says that while wealth is too often neglected as a political issue, it is playing an increasingly important role in our economy and society. Total wealth is now over seven times the value of national income (GDP), having been just 5.5 times as large back in 2006-08.

George Bangham, Research Analyst at the Resolution Foundation, said:

“While incomes have stagnated over the past decade, our national wealth has continued to boom.

“But the UK’s £14.6 trillion of wealth is highly concentrated and unequally spread. The richest ten per cent of households have benefitted most from the recent wealth boom, and own almost half of the nation’s wealth. In contrast, typical households in parts of the North and Midlands are still no wealthier than they were before the financial crisis.

“Wealth has a huge impact on people’s living standards over the courses of their lives, from getting on the housing ladder to drawing down on pension savings later in life. And while wealth has been largely ignored as a political issue in this election campaign, it is playing an increasingly important role in shaping the future of our economy and society.”