Britain’s total wealth grew by 13% in the two years to 2018 to reach a record £14.6tn, with wealth among the richest 10% of households increasing almost four times faster than those of the poorest 10%.
A study by the Office for National Statistics (ONS) also found that the poorest 10% of households had debts three times greater than their assets compared with the richest 10% who amassed a wealth pile 35 times larger than their total debts.
The figures highlight the growing divide between those at the top of the wealth ladder, many of whom have retained their pension rights, property values and invested their savings since the 2008 financial crash, while those on low incomes live in rented accommodation with meagre pension entitlements and rising debts
The Resolution Foundation thinktank said the wealth gap had opened up between 2016 and 2018 after the top 10%’s wealth increased by 11% in contrast to an increase in wealth for the bottom 10th of just 3%.
The different rates of growth documented by the ONS Wealth and Assets survey meant the top 10% finished 2018 with 45% of national wealth, while the poorest 10th held just 2%.
Much of the wealth gap could be accounted for by a rise in the values of homes owned by the better-off that has prevented those lower down the income scale from getting on the property ladder. The foundation said the lack of first-time buyers from lower income groups in recent decades was only partially offset by an expansion of pension saving following the auto-enrolment reforms.
The survey also found that regional wealth gaps have grown, with the fastest pace of growth found in the south-east. Typical household wealth in the south-east is £445,900, more than twice as high as the north-east at £172,900.
The foundation said despite the UK’s record level of wealth, typical wealth in the north-east and east Midlands in 2016-18 was still below its pre-crisis level.
George Bangham, a research analyst at the foundation, said the Gini coefficient, an international measure of wealth inequality, was almost twice as high at 0.63 as income inequality at 0.34.
“Wealth has a huge impact on people’s living standards over the course of their lives, from getting on the housing ladder to drawing down on pension savings later in life,” he said.
“And while wealth has been largely ignored as a political issue in this election campaign, it is playing an increasingly important role in shaping the future of our economy and society.”
Labour has promised to tax the income from wealth at the same level as income from work if it achieves a majority in the general election, pushing up the rate of capital gains tax (CGT) to 40p in the £1. The Conservative party has pledged to maintain CGT at 28%, but said a rise in the national insurance personal threshold will cut a major tax on income.
A separate report by the ONS on the nation’s growing debt pile showed that total household borrowing reached £1.28tn in 2018, of which 9%, or £119bn, was financial debt and £1.16tn, or 91%, was mortgage debt.
Sarah Coles, a financial analyst at the stockbroker Hargreaves Lansdown, said it was disturbing that the number of households with personal, non-mortgage debts had increased from 12.4 million to 12.7 million since 2016 and that the average household’s debts had risen to £9,400, up 11% on 2016.
She said discounting £32bn of student loan debt still left £87bn in loans, credit cards, hire purchase agreements, overdrafts and arrears that needed to be paid off each month.
“It’s an enormous burden of debt and interest to be facing each month, and it keeps rising,” she said.