Many of Britain’s poorest households have not benefited from the country’s post-financial crisis ‘wealth boom’, think tank finds.
Between 2006/8 and 2014/16, overall household wealth rose from £10.1 trillion to £12.8 trillion (after adjusting for inflation), according to Resolution Foundation.
However, while there has not been an overall increase in wealth inequality, the think tank warns the wealth gap has widened within certain regions.
London has the largest gap, according to the think tank’s findings. High-wealth Londoners, defined as those who have more wealth than 75% of households, have 24 times more than low-wealth households.
In the East Midlands, high-wealth households are 12 times better off than low-wealth groups.
While the South West has the smallest gap – 6 times – in relative terms, in cash terms this represents a gap of over £500,000.
The analysis shows low-wealth households in the East Midlands are 42% less wealthy than in 2006-08 in real terms.
In the North East, high- and low-wealth households are worse off, though those in the former suffered less (a 3% fall since 2006-08 in real terms against a much more significant 17% for low-wealth households).
Low-wealth households have seen substantial wealth increases across the South of England and Scotland.
In Scotland, the South West, West Midlands, and the South East, both low- and high-wealth households are now better off, with the wealth gap shrinking between 2006-08 and 2014-16, as growth for low-wealth households outpaced that of high-wealth households.
‘When people think of wealth gaps and inequality in Britain, it’s often London that springs to mind. And though the capital is by far the most unequal region, there are big differences in wealth within every region and nation,’ said Conor D’Arcy, senior policy and research analyst at the Resolution Foundation.
‘These gaps matter, since wealth contributes to where families can live, how they deal with income shocks and the risks they can take. ‘While household wealth overall has grown strongly in recent years and benefitted wealthier households across Britain, it has not fed through to lower wealth households in every region.
‘In some parts of the country – including the East Midlands, East of England, Wales and Yorkshire – the gap between wealthy and poorer households has widened since the financial crisis.’