LONDON (BLOOMBERG) – Britain’s household wealth surged by £900 billion (S$1.7 trillion) during the pandemic, and much of that went to the richest people, a study by the Resolution Foundation showed.
The figure is well above the Bank of England’s estimate for how much money consumers accumulated during lockdowns that shut most stores and prevented people from traveling. It adds to evidence of growing wealth and income inequalities.
Typical families in Britain are £7,800 better off now than before the pandemic despite the biggest economic recession in three centuries, the research group said Monday.
The richest 10 per cent of families enjoyed the biggest absolute wealth increase – more than £50,000. The poorest 30 per cent of adults are just £86 better off.
Soaring property values had the largest impact on wealth, handing disproportionately large gains to property owners. That is a sharp contrast with the previous four recessions, when house prices declined 22 per cent on average.
“Not all households have benefited from this unlikely wealth boom,” said Resolution Foundation senior economist Jack Leslie.
“The poorest households are more likely to have run down rather than increased their savings, and haven’t shared in Britain’s house price bonanza as they’re less likely to own a home in the first place.”
The richest fifth of households are four times as likely to have increased their savings during the crisis when compared with the poorest fifth.
The gap between the wealthiest 10 per cent and average households rose by £44,000 while the gap between the average and the poorest 10th of households grew by £7,000.