Why is the wealth gap so big?

The gap between the wealthiest and poorest people in Britain has grown by almost £5bn over the past decade, according to a report by the think tank Demos.

The figure of £5.2bn represents a 30 per cent increase since the last report in 2013.

But while the numbers of people with wealth over £1m are growing, it is only around 5 per cent of the population.

The Demos report also said that the average person who made more than £20,000 a year was now earning more than a quarter of a million pounds a year.

This is because the average income of those earning over £30,000 has risen by almost a quarter.

The study also found that there were more millionaires in the UK than ever before, with the number of millionaires doubling in the last decade. 

According to the Demos research, in 2017 the top 1 per cent now owned 51 per cent or £2.3 trillion of the country’s wealth, with this proportion rising to 62 per cent in 2022. 

The report also showed that the richest 1 percent owned almost a third of all shares in the public sector, up from a fifth in 2013, while the richest 10 per cent owned more than 30 per 100 people.

The richest 10 percent now own almost a fifth of the UK’s wealth. 

Overall, the report said that this was a big increase on the UK as a whole, with more than half of the nation’s wealth being owned by the richest 5 per 100 households. 

Demos’ report was commissioned by the CBI, which has campaigned for greater equality in wealth distribution.

The report said the wealth of the richest has grown at a rate of about 20 per cent a year for the past 30 years, but the rate of growth has been slowing down. 

It said that although inequality is on the rise in Britain, the rise of the super-rich in recent years has left many feeling under-represented.

“The wealth gap has increased over time as the gap between those who have it and those who don’t has grown larger, even though the gap is now smaller than it was at the height of the financial crisis,” said Demos director and former Treasury official Catherine Crone.

She said the report showed that there are many factors behind the widening wealth gap, including rising inequality, rising inequality of wealth distribution, increased inequality of income, the increase in the size of the top 10 per 10 percent of society, and the increasing wealth of those in positions of influence. 

“The biggest cause of this widening wealth disparity is the rise over the last 30 years of the wealth held by the very top 1 percent,” she said. 

This article was amended on 22 May 2018 to correct the title of Demos’ research.


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