- 6th January 2021
- Posted by: Suzy Hill
- Category: Personal Tax, Business News
Richest 1% hold almost a quarter of UK wealth
The UK’s wealthiest 1% of households hold almost £800bn in assets official statistics show, raising their share of household wealth to 23%, according to the Resolution Foundation
The think tank’s research compared the official Office for National Statistics (ONS) Wealth and Assets Survey (WAS) with data published in the Sunday Times Rich list.
The results suggest that official measures miss around 5% of the total wealth in the UK, held by the very wealthiest households, which the Foundation calculates amounts to around £800bn.
Taking this missing wealth into account significantly increases measures of wealth inequality, raising the top 1% of household’s share of total wealth by over a quarter – from 18% to 23%.
The Foundation says that while wealth inequality has fallen throughout much of the 20th century – the proportion of wealth held by the top 10% has fallen from over 90% at the turn of the 21st century to around 50% by the 1980s – it has been flat or increased slightly in recent decades.
Focusing on how wealth has grown since the financial crisis, the report said that wealth gains have largely come about through changes in asset prices. The vast majority (between 76% and 93%) of financial wealth gains over this period have come through such passive accumulation, rather than saving.
The Foundation says that with rising asset prices driven in part by falling interest rates, which are likely to remain low for the foreseeable future, these wealth gains are likely to be long lasting.
Jack Leslie, economist at the Resolution Foundation, said: ‘The UK has undergone a wealth boom in recent decades, which has continued even while earnings and incomes have stagnated.
‘But official data has struggled to capture these gains, and misses £800bn of assets held by the very wealthiest households in Britain.
‘With the country facing a decade of mounting fiscal pressures, now is the time for Britain to do a better job of taxing its record levels of wealth by reforming our capital gains, inheritance and property taxes.’
The Foundation is calling on the Chancellor to restrict capital gains and inheritance tax reliefs, which it says would raise several billion pounds, and add a council tax supplement of 1% on properties worth over £2m (raising over £1bn).