UK household income was already flatlining BEFORE Covid struck according to new figures that show the huge wealth gap between the young and old and the north and south as cost of living crisis begins to bite
- ONS data showed household wealth grew ‘marginally’ between 2018 and 2020
- Figures showed an enormous gulf in wealth between the young and old
- Middle-aged workers up to 25 times richer than young adults
UK household income was beginning to flatline before the pandemic and the current cost of living crisis struck, according to damning new figures that show an enormous wealth gap between young and old.
Data from the ONS released today showed that the median wealth of British families has risen by 20 per cent since the pre-Financial Crisis period to £302,500.
But the figure only rose ‘marginally’ between 2018 and 2020, the latest period for which figures are available, which came as the Uk was attempting to extricate itself painfully from the EU.
The figures come as British families face a 2022 that could see them hit heavily in the pocket. Experts say that tax rises, soaring inflation and high gas prices could leave them hundreds of pounds out of pocket as soon as April
The ONS data showed an enormous gulf in wealth between the young and old.
The age group with the media highest household income was in families where the head was aged 55 or over and still in work, at £553,400. The ONS noted: ‘The wealth of this group was 25 times higher than those aged 16 to 24 years.’
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: ‘The divide between the richest and poorest groups isn’t widening, but it’s still eye-watering.
‘The richest 10 per cent of households hold 43 per cent of all the wealth, and the least well-off half of the country holds just 9 per cent of the wealth. The mega-wealthy 1 per cent of the country has an average of £3.6 million in assets.
‘While pensions make up a major part of the difference, whether you have got onto the property ladder also drives a huge divide between the most and least wealthy. Property wealth is the second biggest component of wealth overall – at 36 per cent.
‘The very wealthiest are much more likely to own their home outright, while those with fewest assets are likely to be struggling to buy their first property. It’s one reason why older people have far more wealth than younger people, who have a mountain to climb to afford their first property.’
The age of first-time home buyers is 32, the ONS said. Wealth was highest in the South East at £503,400, having risen 43 per cent since 2006 (after adjusting for inflation). Wealth was lowest in the North East at £168,500.
The ONS report noted: ‘The wealthiest region of Great Britain in April 2018 to March 2020 was the South East, which also saw one of the fastest increases in average wealth since 2006.
Median wealth in the South East was £503,400 having risen 43 per cent since 2006, after adjusting for inflation.
‘The regions with the lowest median wealth were the North East and Scotland. Average wealth in the North East (£168,500) was about one-third of the average level of wealth in the South East. The North East is one of the few regions where median wealth is lower now than in 2006.
‘Household wealth in the North East decreased the most since 2006, reducing by 17 per cent. Both the North East and Scotland saw large decreases in median wealth compared with the previous period, of 7 per cent and 12 per cent respectively after adjusting for inflation, with London also experiencing a large decrease of 8 per cent. Home ownership and pension participation rates were lower in these regions.’
It came as it was revealed house prices increased by more than £24,500 on average in 2021, marking the largest annual cash rise since 2003.
The typical UK property value hit a new record high of £276,091 in December 2021, Halifax said.
Property prices hit new record highs eight times last year, according to its monthly index, despite the impacts of the coronavirus pandemic.
But house price growth is expected to slow considerably this year, the report added.
The average UK house price increased by 9.8 per cent annually and by 1.1 per cent month on month in December.