Measuring the wealth gap

Last week we published new analysis showing that the wealth gap in Britain increased by almost 50% between 2011 and 2019 - and we can expect this trend to continue

Last week we published the Wealth Gap Risk Register, a report outlining the evidence for the ways in which wealth inequality in the UK is damaging our economy, society, democracy and environment, and what we can do about it.

The report was subsequently covered in the Independent and the Observer, with Will Hutton writing in the latter that “wealth distribution reeks of unfairness and poses as big a threat to the country’s wellbeing as climate change”, and arguing that we need to “differentiate between value-generating and extractive wealth, and the dangers of an economy and society over-reliant on high property prices”.

If you missed it, you can watch a recording of our launch webinar, featuring Liam Byrne MP, Sonia Sodha of the Observer, and Graham Hobson from the Patriotic Millionaires, here.

To provide some context for the report, we wanted to answer one key question: how big is the wealth gap in the UK, and what has happened to it in the last few years? To find out, we asked Ben Tippet, an economist at King’s College London, to look at the data. Here’s what he found.

Ben analysed data from the Office for National Statistics’ Wealth and Assets Survey(the latest data runs up to 2018-20, referred to below as 2019), and from the Sunday Times Rich List. There’s a full methodology on our website.

Wealth inequality in relative terms (the percentage of national wealth that is owned by the poorest 10%, the wealthiest 10% and so on) has remained relatively stable over recent years. The top 10% own about 60% of the nation's wealth.

However, the total amount of wealth in the UK has increased significantly over the same time period.

Added to that, wealthier groups have seen their wealth increase more in percentage terms than less wealthy groups.

As a result, the median wealth of someone in the wealthiest 10% in society has increased by much more than someone in any other group.

The gap in total wealth between the top 10% and bottom 10% in the UK increased by 48% between 2011 and 2019 (from ￡7.5 trillion to ￡11 trillion). There was a 49% increase in the same gap between the top 10% and the middle 10% (from ￡7.3 billion to ￡10.8 billion).

The gap in median wealth between the top 10% and bottom 10% in the UK increased by 36% between 2011 and 2019 (from ￡778k to ￡1,058k). There was a 37% increase in the same gap between the top 10% and the middle 10% (from ￡747k to ￡1,023k).

The Wealth Gap Risk Register outlines the damage that this wealth gap does to our economy, society, democracy and environment, listing no fewer than 41 negative impacts (but also, on the positive side, 29 things that we can do about it).

As the report argues: “There are plenty of reasons to expect that the wealth gap in the UK will continue to widen over the coming years, so the obvious risk is that each of these existing impacts worsens over time. And since many of these impacts interact and reinforce each other, just as different forms of inequality intersect and exacerbate each other, it is not unrealistic to speculate that we could see the negative impacts of wealth inequality snowballing in the UK over the next couple of decades, and beyond, if action is not taken to reduce the wealth gap or to mitigate its impacts (or ideally both).”

You can see the interactive versions of these charts (and the data tables behind them), along with a full methodology, online.