Financial News

  • 9 April 2013, 14:24

Total UK Wealth Tops 7trn As Rich Get Richer

Total household wealth in the UK has soared past the 7trn mark for the first time but society is becoming more divided, according to new research.

Net wealth - the value of residential buildings and financial assets less outstanding debts - is estimated to have hit 7.05trn at the end of 2012.

But the increase has not been shared equally between the top and bottom rungs of society, with the top 10% accumulating wealth at a much greater rate.

Researchers for Lloyds TSB Private Banking said that despite the current tough state of the economy, there has been a 2.71trn increase over the past decade, equal to a gain of 86,000 per household since 2003.

Lloyds said a rise in financial assets has boosted the increase in household wealth over the last decade, contributing 1.7trn to the overall increase.

The value of household wealth has grown at a faster rate (62%) than either gross household disposable incomes (44%) or the consumer price index (29%), since 2002.

Financial assets include bank and building society deposits, government bonds, shares in listed companies, life assurance and pensions.

Meanwhile, housing wealth has increased by 1trn over the past decade as the value of property has risen by more than the increase in mortgage debt.

Lloyds economist Nitesh Patel said: "Most of this increase came during the 'boom' years prior to 2007 when the economy grew rapidly, with rising employment and incomes."

However, not everyone has gained equally with the stratification of society strengthening, according to the research.

"While wealth has soared in the past decade, there is a large divide in where it has accumulated," Mr Patel said.

"The wealthiest 10% of households hold 22 times more wealth, on average, than those in the bottom half."

Lloyds used official figures as well as those from its own database to make its findings.