12/07/21

UK: Household wealth rose by £900bn during pandemic.

As published on international-adviser.com, Monday 12 July, 2021.

Household wealth in the UK soared by £900bn ($1.2trn, €1trn), a study by the Resolution Foundation revealed.

The independent think-tank found that typical families in Britain are £7,800 better off than before the covid crisis begun, in spite of the economic impact it brought.

But it also discovered that most of the £900bn went to the wealthiest in the country.

The richest 10% of families experienced the biggest absolute wealth increase with more than £50,000, whereas the poorest 30% saw a rise of just £86.

This fuelled the ever-increasing wealth and income inequalities across British families with the gap between the richest 10% and average households growing by £44,000, and between average and poorest by £7,000.

Jack Leslie, senior economist at the Resolution Foundation, said: “The covid-19 crisis has seen a highly unusual combination of a sharp reduction in economic activity, and a sharp increase in household wealth. Many families have been forced to save rather than spend during lockdowns, while house prices have continued to soar even while working hours have plummeted.

“But not all households have benefitted from this unlikely wealth boom. The poorest households are more likely to have run down rather than increased their savings, and haven’t shared in Britain’s house price bonanza as they’re less likely to own a home in the first place.

“As a result, the rising wealth and widening wealth gaps that marked pre-pandemic Britain have been turbo-charged by the crisis. With policy makers facing many tough decisions in the Autumn – from protecting households as unemployment rises to paying for a decent system of social care – they can no longer afford to ignore the dominant role wealth is playing in 21st century Britain.”