A new report has highlighted the growing wealth inequality in Britain, with rising asset prices significantly widening the gap between the wealthiest 10% of households and average earners. The Resolution Foundation, a think tank focusing on issues facing lower- and middle-income Britons, revealed that the richest 10% of households continue to hold around half of the total assets in the country, a trend that has remained relatively stable since the 1980s.
The key driver of this widening gap is the escalating prices of assets, particularly property and private pension savings. These increases have made it increasingly difficult for average earners to accumulate wealth at the same pace as the wealthiest. The report indicated that in 2020-22, an adult in the wealthiest 10% of households held, on average, £1.3 million more wealth than someone in a household in the middle of the wealth distribution. This is a significant increase from the £1 million difference observed in 2006-08.
The disparity is further emphasised when considering income equivalents. The £1.3 million wealth gap now represents 52 years of average income, up from 38 years in 2006-08. Furthermore, the wealth gap between individuals in their early 30s and those in their early 60s has more than doubled, reaching £310,000.
Molly Broome, a senior economist at the Resolution Foundation, commented on the implications of the data, particularly in the context of potential wealth tax increases. She cautioned that higher wealth taxes are likely to affect pensioners and homeowners, especially in regions like London, where house price growth has been most pronounced and property wealth is unevenly distributed. The report was based on an analysis of official data initially released in January.
