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UK Wealth Inequality Reaches Record Levels as Richest 1% Own More Than Bottom 70%

News · October 18, 2025 · Daily Junction Editorial Team · 8 min

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The wealthiest 1% of households in the UK now own £3.5 trillion in assets—more than the bottom 70% combined. New analysis reveals how property wealth, financial assets, and tax advantages have created a two-tier society where wealth begets wealth while millions struggle with debt.

Britain is a country divided not just by income, but by wealth—and the gap is growing. The wealthiest 1% of households now own £3.5 trillion in assets, more than the bottom 70% combined, according to the latest Wealth and Assets Survey from the Office for National Statistics (ONS), published in January 2024. This is not the result of hard work or entrepreneurial genius. It is the result of decades of asset price inflation, regressive tax policy, and a housing market that has turned homes into speculative investments rather than places to live. Wealth inequality is higher in the UK than income inequality, and it has grown faster since 2010. It is a structural feature of the economy, not a bug—and it is corroding social cohesion, economic mobility, and democratic legitimacy.

The scale of wealth inequality

The ONS Wealth and Assets Survey (2020-22, published 2024) provides the most comprehensive picture of household wealth in the UK. The headline figures are stark:

• Total household wealth: £17.5 trillion
• Median household wealth: £302,500 (half of households have more, half have less)
• Top 10% of households: own 43% of all wealth (£7.5 trillion)
• Top 1% of households: own 20% of all wealth (£3.5 trillion)
• Bottom 50% of households: own 9% of all wealth (£1.6 trillion)
• Bottom 10% of households: have negative wealth (debt exceeds assets)

Wealth is far more unequally distributed than income. The Gini coefficient (a measure of inequality, where 0 = perfect equality and 1 = maximum inequality) is:

• Wealth: 0.63
• Income: 0.35

This means wealth inequality is nearly twice as high as income inequality.

What is wealth, and who owns it?

Wealth is the total value of assets owned by a household, minus debts. The ONS divides wealth into four categories:

1. Property wealth (60% of total wealth, £10.5 trillion)

This is the value of owned homes and other property (buy-to-let, second homes), minus mortgages. Property wealth is the largest component of household wealth and the main driver of inequality.

• Homeowners have median wealth of £470,000
• Renters have median wealth of £8,000

The gap is driven by decades of house price growth. The average UK house price rose from £50,000 in 1995 to £290,000 in 2024 (ONS House Price Index), a 480% increase. This has created unearned wealth for homeowners, while renters pay rising rents and cannot save for a deposit.

2. Pension wealth (30% of total wealth, £5.3 trillion)

This is the value of private and occupational pensions (excluding the state pension). Pension wealth is highly unequal:

• Top 10% have median pension wealth of £1.2 million
• Bottom 50% have median pension wealth of £0 (no private pension)

Pension wealth is concentrated among older, higher-income workers in secure employment. Younger workers, gig economy workers, and low-income workers often have no pension beyond the state pension (£11,500 per year).

3. Financial wealth (8% of total wealth, £1.4 trillion)

This is savings, investments, stocks, bonds, and other financial assets. Financial wealth is the most unequally distributed:

• Top 10% own 60% of all financial wealth
• Bottom 50% own 2% of all financial wealth

The wealthy hold stocks and bonds that generate returns (dividends, capital gains) taxed at lower rates than earned income. The poor hold little or no financial assets and often carry debt.

4. Physical wealth (2% of total wealth, £0.3 trillion)

This is the value of possessions (cars, furniture, jewelry, art). Physical wealth is relatively evenly distributed and contributes little to overall inequality.

How wealth inequality has grown

Wealth inequality has grown significantly since 2010, driven by:

1. House price inflation

House prices have risen faster than incomes, creating wealth for homeowners and locking out renters. The house price to earnings ratio has risen from 3.5 in 1997 to 8.0 in 2024 (ONS). In London and the South East, it exceeds 12.

This benefits older homeowners (who bought when housing was affordable) and harms younger renters (who face prices 8-12 times earnings). It also creates regional inequality: homeowners in London and the South East have seen wealth gains of £200,000+, while homeowners in the North and Midlands have seen gains of £50,000.

2. Stock market growth

The FTSE 100 has risen from 6,000 in 2010 to 8,200 in 2024, a 37% increase. This has benefited the wealthy, who own stocks and shares, while the poor (who own no financial assets) have seen no gains.

3. Low interest rates and quantitative easing

The Bank of England cut interest rates to 0.1% in 2020 and bought £895 billion in government bonds (quantitative easing) to stimulate the economy. This inflated asset prices (property, stocks) but did little for those without assets. The Bank of England's own analysis (2021) found that quantitative easing increased wealth inequality by boosting asset prices.

4. Regressive tax policy

The UK taxes wealth at far lower rates than income:

• Income tax: 20-45% (plus 8-12% National Insurance)
• Capital gains tax: 10-20% (half the rate of income tax)
• Inheritance tax: 40% (but only 4% of estates pay it, due to exemptions and reliefs)
• Annual wealth tax: 0% (the UK has no wealth tax, unlike Switzerland, Spain, and Norway)

This allows wealth to accumulate and compound tax-free, while earned income is heavily taxed.

5. Inheritance

Wealth is passed between generations, entrenching inequality. The Resolution Foundation estimates that £150 billion per year is transferred through inheritance and gifts, mostly from wealthy parents to wealthy children. Children of homeowners inherit property wealth; children of renters inherit nothing.

The consequences of wealth inequality

Wealth inequality is not just unfair—it is economically and socially harmful.

1. Reduced economic mobility

Wealth inequality entrenches advantage and disadvantage across generations. Children of wealthy parents can afford university, unpaid internships, and deposits for homes. Children of poor parents cannot. The UK has lower social mobility than comparable countries: a child born into a low-income family has only a 17% chance of reaching the top income quintile as an adult (OECD, 2023).

2. Reduced economic growth

Wealth inequality reduces economic growth by concentrating resources in the hands of the wealthy, who save and invest rather than spend. The IMF has found that high inequality reduces GDP growth by 0.5-1% per year, as low-income households (who would spend additional income) have no money to spend.

3. Housing unaffordability

Wealth inequality drives housing unaffordability. Wealthy households buy second homes and buy-to-let properties as investments, driving up prices and locking out first-time buyers. The UK has 5.4 million second homes and buy-to-let properties (ONS, 2024), equivalent to 20% of the housing stock.

4. Political inequality

Wealth inequality creates political inequality. The wealthy have disproportionate political influence through donations, lobbying, and media ownership. They use this influence to protect their wealth through tax cuts, deregulation, and opposition to wealth taxes.

5. Social division

Wealth inequality creates a two-tier society: asset-owners and asset-less. This erodes social cohesion, trust, and solidarity. The Equality Trust has found that high inequality is associated with lower trust, higher crime, and worse health outcomes.

International comparison: the UK is an outlier

The UK has higher wealth inequality than most comparable countries. The Gini coefficient for wealth is:

• UK: 0.63
• France: 0.58
• Germany: 0.57
• Canada: 0.55
• Australia: 0.54

The UK also has lower wealth taxes than comparable countries:

• Switzerland: annual wealth tax of 0.3-1% (varies by canton)
• Spain: annual wealth tax of 0.2-3.5% (varies by region)
• Norway: annual wealth tax of 0.85%
• UK: no annual wealth tax

What would a wealth tax raise?

The Wealth Tax Commission (2020), an independent expert group, proposed a one-off wealth tax of 1% per year for five years on individual wealth above £500,000 (excluding pension pots). This would:

• Affect the wealthiest 10% of adults (6 million people)
• Raise £260 billion over five years (£52 billion per year)
• Be paid from wealth, not income (e.g., by selling assets or taking a loan secured on assets)

An annual wealth tax of 1% on wealth above £1 million would:

• Affect the wealthiest 5% of adults (3 million people)
• Raise £10 billion per year

For comparison:

• Income tax raises £200 billion per year
• National Insurance raises £150 billion per year
• VAT raises £150 billion per year
• Council tax raises £40 billion per year (a regressive property tax that falls hardest on low-income households)

A wealth tax would be progressive (falling on the wealthy) and efficient (hard to avoid, as wealth is less mobile than income).

The political obstacles

Wealth taxes are politically difficult because:

1. The wealthy have political power. They fund political parties, own media outlets, and lobby against wealth taxes.
2. Homeowners fear losing wealth. Many middle-class homeowners have benefited from house price growth and oppose policies that might reduce property values.
3. Myths about wealth taxes. Opponents claim wealth taxes would cause capital flight, harm investment, and be impossible to administer. The evidence from Switzerland, Spain, and Norway contradicts this.

What needs to happen

The solutions are not complicated. They are politically difficult.

First, introduce an annual wealth tax. A 1% tax on wealth above £1 million would raise £10 billion per year and reduce wealth inequality.

Second, reform inheritance tax. Close loopholes (e.g., business relief, agricultural relief) and reduce the threshold to £250,000 (from £325,000). This would raise £5 billion per year.