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November 23, 2014 / C H Thompson

Wealth inequality

wealth inequality

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This data is from the Office for National Statistics ‘Wealth in Great Britain, Wave Three’ report covering the years 2010-12 (the most recent period for which data is available). The report can be found online at http://www.ons.gov.uk/ons/rel/was/wealth-in-great-britain-wave-3/2010-2012/index.html

The image is taken from Inequality Briefing 

Britain’s households are wealthier. This fact was reported by BBC’s Robert Preston in the Times 30/12/14 who wrote about the media net worth of British households having risen sharply in the past 10 years by around 10% to a little over £220,000. Part of the reason for this increase is growing house prices along with a strong performance of stock and bond markets (which has improved the value of pension funds) since 2008 banking crisis.

Though the data shows the increases in household wealth most people in 2014 do not feel wealthy. This is due to the figures covering the median household wealth across a broad range of households. One reason for the increase in wealth is the very low level of interest rates boosting the value of financial assets. But there is also a huge differences in the amount of household wealth. The figures for median household wealth are across a huge range. There are huge regional, social-class and generational differences.

Households in the 55-64 age range have the greatest wealth, with a median almost double that of the median for all households. To catch up the Times reported 31/12/14 younger people would need to save half their gross income every year for the next 30 years. On top of this net incomes are substantially below their pre-crisis levels. In 2012-13 median income declined by 1.4% to £23,000, the lowest level fin 10 years. From this we can see household wealth is outstripping income growth.

One way of narrowing the gap between household wealth and incomes could come from increasing welfare payments as well as firms increasing wages/salaries through higher productivity. In the longer term investment in skills and equipment could be stimulated by governments making business investment attractive through tax breaks.

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