The wealth gap between the richest and poorest in the UK has surged by almost 50% in less than a decade, according to recent research. The Independent reported on the findings which highlight the impact of stalling wages and escalating asset values on inequality amidst austerity measures. The analysis, conducted by the Fairness Foundation, raises concerns about the far-reaching effects of this growing wealth disparity on the UK.
Researchers warn that the widening wealth gap poses significant risks to the country, including social unrest, failure to address the climate crisis, economic stagnation, and the erosion of democracy. A recent poll revealed that three in four voters are apprehensive about the repercussions of wealth inequality in Britain. In response to these concerns, Sir Keir Starmer has been urged to address this issue to mitigate risks by a coalition of academics, charity leaders, and business figures.
The report indicates that the wealth divide now undermines growth and productivity in the UK, impacting the government’s objectives in various areas such as the economy, healthcare, crime prevention, sustainable energy, and education. Suggestions for tackling the wealth gap include revising capital gains tax, abolishing the “non-dom” system, and assessing the strategic threats posed by wealth inequality in a forthcoming national resilience review.
With the UK’s wealth inequality second only to the United States among OECD countries, the absolute wealth gap grew by 48% between 2011 and 2019. Analysis of Office for National Statistics data by King’s College London revealed that while the wealthiest 10% accumulated £11 trillion in wealth, the poorest 10% were left with £11 billion in debt by 2019. This disparity has been driven by soaring asset prices alongside stagnant wages.
The report also highlights the concerning trend of wealth concentration among fewer hands within the UK. The wealthiest households now possess significantly more wealth per adult compared to the average household, while the poorest half of the population owns just 9% of the country’s wealth. This imbalance not only impacts financial security but also exacerbates generational disparities, hindering economic productivity and fostering societal divisions.
The study emphasizes that the risks associated with wealth inequality are not merely theoretical but have tangible impacts on public services, the economy, democracy, and the nation’s ability to achieve net zero emissions. With public concern over wealth inequality rising, there is a growing awareness of the unfairness and consequences of this disparity, which could have severe implications for the future of the UK unless urgent action is taken to address the root causes.