United Kingdom

2014


UK- London

Advancing gain

The UK has information on both the level and the distribution of wealth dating back more than a century. These data show a large decline in wealth concentration from 1900 to the late 1970s, and relative stability of the wealth to income ratio during the same period, with the value typically lying between 4 and 5 for much of the time.

Around 1985, the situation changed as UK wealth began a period of sustained growth fuelled by a robust housing market and good equity returns. The boom ended with the financial crisis in 2007. At that time, the wealth-income ratio had risen above 9, the highest level recorded for any country apart from Japan at the peak of its asset price bubble in the late 1980s.

The subsequent fall in both real property and financial assets led to a 12% drop in average wealth measured in pounds sterling, but the simultaneous GBP depreciation caused wealth per adult in USD to plummet by 36%. Average wealth in pounds sterling fluctuated around the pre-crisis peak up to 2013, but last year rose 6% above the 2007 level. In USD terms, however, wealth per adult remains below the 2007 figure.
Financial and non-financial assets are roughly equal in importance in the UK. Along with many other countries, household debt grew quickly as a multiple of income from 1980 onwards, tripling in value to reach 180% in 2008. The debt to income ratio subsided to 150% by 2013, but has subsequently risen back to 170%. At 16% of gross wealth, debt is not exceptionally high by international standards.

Nowadays the pattern of wealth distribution in the UK is very typical for a developed economy. Almost 60% of the population has wealth exceeding USD 100,000 and there are two million US dollar millionaires.

2013

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