"It is true that for the last decade or so, the poor have become poorer and the rich much richer."Longer than that. The last 4 decades."The wealth gap in the UK has significantly widened, especially since the 1980s, with a substantial increase in absolute wealth disparities even as relative wealth inequality has been high and relatively stable for decades. This surge in the absolute gap is largely driven by wealth generated from asset growth, particularly in the housing market, leading to higher living costs for those with no wealth and making it increasingly difficult for younger, less wealthy generations to build assets. Key Trends in the UK Wealth GapWidening Absolute Gap:While the proportion of wealth held by the richest 10% has remained fairly consistent over recent decades, the absolute value of their wealth has grown enormously. Increased Concentration of Wealth:Since the 1980s, the wealth gap has widened to its highest recorded level, second only to the US among advanced economies. Dominance of Asset Growth:The rise in net household wealth has been significantly influenced by capital gains from assets, especially housing, rather than increased savings, which has stretched the wealth distribution. Lack of Financial Buffer:The widening gap leaves a large portion of the population with little to no wealth, making them vulnerable to the rising cost of living and with limited financial assets to fall back on. Impact on Generations:Wealth inequality is now more pronounced across generations, with individuals born in the 1980s facing greater challenges to acquire wealth compared to earlier generations. Drivers of the Wealth GapHousing Market:The UK's housing market boom has been a significant factor in the rise of net household wealth and the widening gap between those who own assets and those who do not. Inheritance:The intergenerational transfer of wealth plays a key role, favoring those with wealthy parents and making it harder for others to climb the wealth ladder. Wealth Concentration:There is a trend toward the consolidation of resources into fewer hands, with wealth accumulating and amplifying over time. Consequences of the Wealth GapEconomic Impact:The wealth gap can undermine productivity, growth, and the ability to reach net zero targets.Social Impact:It reduces social cohesion and can damage faith in democracy. Life Chances:Wealth has a significant impact on life chances and outcomes, with those lacking assets facing higher levels of poverty. (AI)
David Ainsworth ● 21d