Reuters
Published Jul 11, 2021 07:12PM ET
By David Milliken
LONDON (Reuters) - A boom in Britain's housing market and a surge in global share prices has led to windfall gains for middle-income and richer households during the coronavirus pandemic, research https://www.resolutionfoundation.org/events/whose-wealth from the Resolution Foundation think tank showed on Monday.
The average British household saw its wealth rise by 7,800 pounds ($10,800) due to asset price rises and, to a lesser extent, lower day-to-day spending, despite Britain suffering its sharpest economic downturn in more than 300 years in 2020.
"Many families have been forced to save rather than spend during lockdowns, while house prices have continued to soar even while working hours have plummeted," said Jack Leslie, senior economist at the Resolution Foundation https://www.resolutionfoundation.org.
The biggest percentage increase in wealth came for those in the middle of the wealth distribution, whose net assets increased in value by 9% to 80,500 pounds per adult, driven by a sharp rise in house prices.
Aided by a cut in property purchase taxes and greater demand for more spacious houses suited to working from home, British house prices rose by 9.9% in the year to March, the biggest increase since 2007.
The richest 10% households - who hold a greater proportion of their wealth in shares and less in housing than the median household - saw a smaller percentage rise but the biggest absolute gain of 44,000 pounds per adult.
By contrast, the least wealthy 30% of Britons saw an average increase in their wealth of just 86 pounds.
The Resolution Foundation said Britain's government should look harder at how to tax increases in wealth, rather than place most of the tax burden on earned income and spending.
The findings are also likely to interest the Bank of England, which thinks Britain's economy might get a modest boost from households spending some of their extra wealth.
However, opinion polling used in the study raised the risk of the opposite. Only 14% of households that had built up savings during the pandemic said they were "very likely" to spend them. By contrast, 35% expected to save more even after the pandemic, often because they had got used to economising.
($1 = 0.7227 pounds)
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.