High levels of inequality persist with top 10% owning almost half the total wealth, show figures
Britain on the eve of the EU referendum reached its wealthiest position in modern history, according to figures showing the vast gulf between the richest 1% and the poorest in society.
Total net household wealth – including property, cash savings and shares, pensions and possessions such as cars and antiques – increased by 15% to £12.8tn in the two-year period ending in June 2016, according to figures published on Thursday by the Office for National Statistics.
Despite the overall increase, the picture of wealth in Britain shows limited progress being made to reduce inequality, with the poorest fifth of households seeing their overall wealth decline in real terms. The top 10% of households owned almost half of all total wealth, while those in the top 1% owned assets worth at least £3.2m. Those in the bottom 10% had £14,100 or less.
The figures also show how those born into money are able to further their riches with relative ease, as the country’s total wealth levels rose at more than twice the rate of income. While the top 10% of households by income earn 6.8 times more than those on the lowest rung in terms of pay, the wealthiest 10th of households have 290 times more in total assets than those at the bottom of the pile.
There was a striking difference in wealth between the regions, with the biggest gains over the two years to June 2016 coming in London amid soaring property prices. The north-east was the poorest region in terms of aggregate total wealth, holding just £370bn, versus £2.5tn in the south-east, which was the wealthiest.
Inequality, as measured by the Gini co-efficient, which gives a score ranging from zero to one according to how riches are divided across the country, shows that wealth inequality, at 0.62, is nearly twice as high as income inequality, at 0.35. A score of 1 would mean a single person took everything.
The figures are likely to reignite the debate about how wealth and income are taxed in Britain, amid growing concerns about the division between rich and poor around the world.
According to the Resolution Foundation, revenues for the exchequer from wealth taxes have remained flat as a share of GDP for half a century, while the total amount of wealth has more than doubled compared to national income.
Conor D’Arcy, of the Resolution Foundation thinktank, said: “Britain is very good at generating wealth, but terrible at spreading it around the country and even worse at taxing it properly. As a result, we have unacceptably high levels of wealth inequality.”