The UK wealth gap has widened during this pandemic as the richest 10% gained £50,000 on average, revealed the latest report from the Resolution Foundation.
The report, released on Monday, found that the Covid-19 crisis has allowed high-wealth households to amass savings and benefit from rising house prices far more than those with little or no wealth.
The richest fifth of households are four times more likely than the poorest fifth of households (47% vs 12%) to have increased their savings during the crisis, and 2.5 times as likely to have reduced their debts.
As a result, middle-wealth families have experienced the biggest relative wealth increase of 9% (up £7,800, taking their average total wealth to £80,500 per adult), while the richest 10% of families have experienced the biggest absolute wealth increase of over £50,000 over the past year (taking their total wealth to £1.4m per adult).
In contrast, the poorest 30% of households have seen an average wealth increase of just £86 per adult over the course of the pandemic.
The gap between the average and the wealthiest 10% of households increased by £44,000 during the crisis (following a £350,000 increase between 2006-08 and 2016-18).
Meanwhile, the gap between the average and the poorest tenth of households has also grown by £7,000 during the crisis (a bigger increase than seen during the whole 2006-08 and 2016-18 decade).
Total household savings on the other hand are £200bn higher than they were pre-crisis, household debts (excluding credit cards) have fallen by around £10bn, and house prices – which have fallen by an average of 22% over the previous four recessions – have risen by 8% since February 2020.
Jack Leslie, Senior Economist at the Resolution Foundation, said: “The rising wealth and widening wealth gaps that marked pre-pandemic Britain have been turbo-charged by the crisis. With policy makers facing many tough decisions in the Autumn – from protecting households as unemployment rises to paying for a decent system of social care – they can no longer afford to ignore the dominant role wealth is playing in 21st Century Britain.”