The UK's growing wealth gap has been exacerbated by the pandemic, with the wealthiest 10% of households now holding over 40% of the country's net assets.
A recent report from the Office for National Statistics (ONS) found that during the pandemic, the wealth of the richest 10% of households increased by £150 billion to £2.8 trillion. This is a staggering increase, equivalent to an average annual growth rate of 20%.
In contrast, the wealth of the poorest 50% of households decreased by £30 billion to £350 billion. The middle class has also seen its wealth decline, with the richest half of households now holding around 70% of the country's net assets.
The pandemic has highlighted the existing inequalities in the UK, where those who are already wealthy have a greater ability to weather economic downturns and take advantage of investment opportunities. This is particularly true for those with access to savings, investments, and other forms of wealth.
One of the main factors contributing to this widening gap is the way that the government has supported certain groups during the pandemic. For example, self-employed individuals have been eligible for a lower rate of state pension, while furloughed workers were not entitled to the same level of support as employed individuals.
Meanwhile, those who own more than £2 million have seen their wealth increase by an average of 20% since 2020, largely due to the pandemic's impact
on property prices and share market values. This is a stark contrast to those on lower incomes, who have struggled to make ends meet during this time.
The report also found that the wealthiest 1% of households now hold around 25% of the country's net assets. This is up from 15% in 2014-16 and highlights the growing concentration of wealth among a small elite.
Critics argue that these figures are not surprising, given the long-term trend of increasing inequality in the UK. However, many will be concerned by the fact that this gap has widened further during the pandemic.
The ONS report suggests that this widening wealth gap may have significant implications for social cohesion and overall economic health. It is likely to lead to increased tensions between different social classes, particularly if those on lower incomes feel left behind by the recovery.
The government has announced various measures aimed at addressing some of these inequalities, including a review of the tax system to ensure that everyone contributes their fair share. However, more needs to be done to address the root causes of this growing wealth gap.
Ultimately, the widening wealth gap in the UK is a symptom of a broader issue - one that requires sustained attention and effort from policymakers, businesses, and individuals alike. By working together, we can build a more equitable society where everyone has access to the resources they need to thrive.