by Mark Johnston
Household Wealth in 2013.
Household wealth, in most studies, includes equity in property, savings, pensions, shares and also income from wages, all this less the value of the households debts.
Official figures have disclosed that the average household in Britain has seen its wealth jump by more than £150,000 during the last century, as in 1959 the typical household wealth was the equivalent of £72,700 in today’s money.
Research conducted by Lloyds TSB private banking suggests that the average household is now worth around £255,502.
Housing wealth has increased on a whole by around £1 trillion over the past decade as the value of property has risen by more than the increase in mortgage debt. Although it does seem that most of this increase came during the ‘boom years’.
Recent research therefore has found that total household wealth in the UK has soared past the £7 trillion mark for the first time ever.
Some analysts believe that in addition to greater overall economic prosperity, government policy measures such as ‘right to buy’ and the privatization of nationalized industries, coupled with the liberalization of financial markets, have provided households in the UK an increase in their wealth in the forms of both housing and financial assets.
Nitesh Patel, economist at Lloyds TSB private banking, said “household wealth has gone past £7 trillion for the first time, growing by over an estimated £2.7 trillion in the past decade”.
It seems then that according to some experts in terms of global poverty the UK is a wealthy country.
However, some experts believe that these figures do mask huge inequalities in the UK as figures show that there is still around 13.5 million people in the UK still in poverty.
These same experts have therefore stated that while it appears that household wealth in the UK has soared in the past decade, there is still a large divide in where it has accumulated.
A current report published by the Office for National Statistics (ONS) reveals that the richest 10 per cent of all UK households are around 850 times wealthier than the bottom of UK households, as they own around 40 per cent of all the reported wealth.
Soaring energy bills, dwindling house prices and the high cost of food have been taking their toll on many households total wealth.
Findings by Alliance Trust, an investment company, show that “on top of this, economic activity has slowed and we have seen a rise in the unemployment rate which makes conditions even tougher”.
Jonathan Welfare, chief executive of charity Elizabeth Finn Care, which provides direct financial support to individuals in need, suggests “while it is encouraging that most people have been enjoying increasingly comfortable living standards, the fact remains that the wealth divide is at its widest point for more than 40 years”.
Therefore experts feel that the adequacy levels of household wealth is still an issue that needs to be given more attention especially as a result of the turmoil experienced in the global economy.
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