What is the state of economic inequality in the UK? And why does it matter?
Most discussions of economic inequality focus on income, the annual flow of monies to people – earnings, benefits, rent and interest. This one will focus on wealth. Wealth is not income. It is accumulated monies; a stock not a flow. The wealth of the rich produces their income, and the income of the rich produces their wealth. When income inequality is reduced, wealth inequality also tends to decrease, but only decades later. In the past the direct taxation of wealth has sped up this process, making everyone better-off. Today a small and very wealthy group of people prefer you not to know this.
The reported average median household wealth of the best-off tenth of all households in the UK is £1,393,900 more than the paltry median wealth of the poorest tenth. The former have, on median average, recourse to £1.4 million of household wealth each; 290 times the median average household wealth of the poorest 10%. Of what can be counted, this richest tenth hold 42% of their wealth in pension rights, 32% in property, 20% in savings and just 6% in goods (ONS, 2014a). By contrast, almost all the wealth of the poorest tenth of households is accounted for by the low value of their household goods. The gap between those at the very top and the rest has been growing rapidly.