Britain's wealth gap has ballooned during the pandemic, with the richest 10% gaining £50,000 on average, while the poorest third added just £86, according to a Resolution Foundation report. The thinktank said the benefits of rising house prices and forced savings had been skewed to the richest by a ratio of more than 500 to 1.
Total UK wealth increased by £900bn to £16.5tn during the crisis, the first time wealth has risen during a recession since the 1940s. Household savings rose by £200bn, debts fell by £10bn, and house prices increased by 8%, contrasting with an average 22% fall in previous recessions.
But the poorest households were more likely to have run down savings and did not benefit from the housing boom because they are less likely to own homes. The richest fifth were four times more likely to have increased savings (47% vs 12%) and 2.5 times more likely to have reduced debts.
The gap between the average household and the wealthiest 10% grew by £44,000 during the crisis, while the gap between the average and the poorest 10% widened by £7,000—a bigger increase than in the previous decade. Adults in the top 10% now have £1.4m each, while the poorest 30% have just £86 more.
Jack Leslie, senior economist at the Resolution Foundation, said the findings should make the government rethink scrapping the £20 weekly universal credit uplift. Mubin Haq of Standard Life Foundation warned that cutting UC risks 'further widening the wealth divide which ballooned during the pandemic'.
