Wealth inequality ‘rising again after decade-long fall’
Rising home ownership fuelled a “significant closing of the wealth gap” between rich and poor in the decade or so before the financial crisis but that progress has gone into reverse, the report from think-tank, The Resolution Foundation said.
It found the nation’s £11.1trn of wealth is distributed far less equally than earnings or household income and that the top 1% owns 14% of Britain’s wealth.
According to the think-tank, the pre-crisis fall in inequality was driven by high and rising home ownership but 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 report also found the wealth of a typical British adult has fallen since the financial crisis, from £99,000 in 2006-08 to £84,000 in 2012-14. It put the fall down to reductions in property wealth, driven by falling home ownership and the fall in house prices that followed the crisis which have still not fully recovered in many parts of the UK.
Conor D’Arcy, policy analyst at the Resolution Foundation, said: “With wealth inequality now rising again, the progress of the pre-crisis period has gone into reverse. 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 fueling the wealth gap between rich and poor, while also creating sharp wealth divides between young and old too.
“At £11.1trn and growing, Britain has a lot of wealth to share around. It’s vital that policy makers ensure that the key drivers of wealth in Britain today – property and pensions – are accessible to as many people as possible, young and old.”