Pandemic: Average household wealth grows for first time during recession since 1940’s
Britain’s wealth gap continued to widen during the pandemic, with the richest 10 per cent earning £50,000 on average, according to think tank The Resolution foundation.
The foundation attributed the increase to rising house prices and a lack of spending opportunities.
Jack Leslie, a senior economist at the think tank, said it was rare for wealth to increase during a recession. However, the impact of the pandemic had been to ”turbo-charge” the gap between the rich and poor.
Upon the findings of the report, they have also said the government should rethink its decision to remove the £20 a week increase to Universal credit in September.
Mubin Haq, Chief executive of the Standard Life Foundation, added: ”Wednesday’s announcement of the cut to UC risks further widening the wealth divide which ballooned during the pandemic.”
Households
The report had found that the average household had enjoyed a windfall of £7,800 per adult. This is the first time wealth has increased during a recession since the mid-1940s.
Britain suffered its biggest one year fall in output in more than 300 years in 2020. Despite this, total household savings grew by £200bn, household debts decreased by £10bn and house prices- which fell by an average of 22 per cent in the past four recessions- rose by 8 per cent.
It is also recorded that the richest fifth of households was four times as likely to have increased their savings during the crisis than the poorest 5th of households (47 per cent versus 12 per cent). They were also 2.5 times as likely to have reduced their debts.
The wealth gap between the average and wealthiest 10 per cent of households had increased by £44,000, whilst between the average and poorest 10 per cent was £7,000.