Nearly 10% of British households are classed as millionaires, but their wealth is rooted in property values and pension pots rather than cash, according to a study by the Office of National Statistics (ONS).
The latest Wealth and Assets Survey (WAS) also reveals that most of the millionaire households are in the South East.
The report also shows that the country’s wealthiest 10% of households have more than 40% of overall wealth.
The bottom 50% owns just 10% of the nation’s wealth.
Alarmingly, the richest are more 850 times as wealthy than the least wealthy 10% of households.
Richest families worth £1m each
The ONS says that the top 10% of wealthy households, which is around 2.5million families, have assets worth more than £967,000 each.
The figures show that the average wealth of the richest households is around £1.3 million – which suggests that the wealthiest are many times richer.
The survey makes for sober reading when it reveals that nearly half of British families have almost nothing, with few assets and a poor chance of a comfortable retirement.
The bottom 10% of families has assets of less than £13,000.
The ONS surveyed 20,170 households between 2008 and 2010, taking home values based on the market value less mortgage debts.
Despite this, the wealth survey shows the typical family has a total household wealth of £232,000, although few feel wealthy and often struggle to make ends meet.
Pension pots add to wealth
However, a lot of the wealth has been fuelled by the boom in property prices, while many of those in the top 10% bought their properties decades before values soared.
There are also regional variations within the survey. The South East is top with 15.5% of the wealthiest households – one in six, with just 6.9% in Scotland and 7.6% in the North East and North West.
The size of pension pots is also important since there are 926,000 households aged between 55 and 64 who are in the top 10% of richest Britons and they have large pension pots to fund their upcoming retirement.
For more than half of the richest, it’s their pension pot that puts them into the bracket. Their pension pot is worth on average £742,000 while the bottom 50% had pension pots worth an average of £4,000.
The top 10% are worth around a total of £4.5 trillion, according to the survey, while the bottom 10% are worth £5.2 billion.