Financial News

Which Side Of The Wealth Gap Do You Stand On?

Property values are making the wealth gap wider between the Britain’s richest and poorest.

The richest 1% own 14% of Britain’s £11.1 trillion wealth, while the poorest 15% have no wealth or are in debt.

Since the financial crisis, property wealth has fallen by 12% for the least well-off, while the figure has risen 1% for the richest 10%.

Think tank the Resolution Foundation, which carried out the research, says the shift in property fortunes is fuelling wealth inequality.

The richer are even richer

Although Britain has grown richer since the financial crisis – with national net worth rising from £9.9 trillion to £11.1 trillion, average adult s have seen their personal wealth drop from £99,000 in 2006-08 to £84,000 in 2012-14.

This personal worth includes property, private pensions, cash and other assets.

The think-tank blames the fall on lower house prices that are yet to recover from the financial crisis and a recent decrease in the number of people owning a home.

Conor D’Arcy, policy analyst at the foundation, said: “The accumulation of wealth over the course of our lives is arguably the most important driver of lifetime living standards, and yet it is largely ignored in public debate.

Unequal distribution of wealth

“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.

“While many assume we live in a country of ever growing wealth inequality, in fact Britain witnessed a significant closing of the wealth gap in the decade before the crisis. This is largely due to rising home ownership which enabled many less wealthy families to gain a key asset and benefit from rising property prices.

“With wealth inequality now rising, 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 property are now fueling the wealth gap, while creating sharp wealth divides between the young and old too.”

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