The Resolution Foundation has found that the UK’s wealth gap has been widening over the past decade, with the top one per cent, some 488,000 people, owning 14% of the nation’s assets – worth about £11 trillion. At the other end of the financial scale, 15% (7.3 million people) either own no assets at all, or are in debt.
T he non-partisan think tank said the spreading of property wealth in the mid-1990s and mid-2000s fuelled a decade-long fall in wealth inequality – but that progress has since gone into reverse. The proportion of property wealth owned by the bottom four-fifths of adults grew from 35% in 1995 to 40% in 2005.
However, “with home ownership steadily falling since its mid-2000s peak, the proportion of property wealth owned by the bottom four-fifths of the population has started to fall again”, the Foundation said.
Conor D’Arcy, policy analyst at the Resolution Foundation added: “Given the hugely unequal distribution of wealth across Britain, it’s time we looked into how the nation’s wealth is divided up and what the consequences are for those who never build up assets of any significance.
“Falling levels of home ownership mean that, having once been a great force in driving down inequality, shifts in who owns what property are now fuelling the wealth gap between rich and poor, while also creating sharp wealth divides between young and old.”
The analysis also showed that generational wealth progress has gone into reverse, with all born since 1955 falling behind predecessors at the same age. A typical adult in the second-youngest baby boomer born 1956-60 had 7 per cent less wealth at age 55 than someone the same age five years previously. A typical adult born during 1981-85 had half as much total net wealth at age 30 as a typical adult at the same age five years before them.
Unexpected wealth windfalls – rather than active savings behaviour – explain the majority of families’ wealth accumulation in recent decades. The vast majority (82 per cent) of net property wealth growth since the early 1990s has been driven by the house price boom rather than active savings.