According to a new analysis from the Office for National Statistics (ONS), Britain’s richest 1% have as much wealth as the poorest 55% of the population put together. This analysis includes wealth in terms of property, pensions and financial assets.
Inequality between the north-south divide has also worsened, with household wealth in the south-east rising five times faster than the rest of the country. The average wealth of households in the south-east rose 30% from 2006-8 to the end of 2012, whereas the average rise in England was only 6%.
In addition, the north-east was the only region where average household wealth actually fell.
The report states that the situation is likely to have worsened due to an 18% rise in house prices over the past year in the south-east. In addition, a rush to save among richer households during the recession boosted the nation’s total wealth, with the top 10% owning 44% of the household wealth, and the poorest 50% of the country owning only 9%.
A recent report from Oxfam also showed that five billionaire families own the same wealth as 20% of the population.
Rachael Orr, Oxfam’s head of poverty in the UK, stated: “It is further evidence of increasing inequality at a time when five rich families have the same wealth as 12 million people.
“We need our politicians to grasp the nettle and make the narrowing gap between the richest and poorest a top priority. It cannot be right that in Britain today a small elite are getting richer and richer while millions are struggling to make ends meet.”
Director of the Equality Trust, Duncan Exley, also stated: “The grotesque concentration of wealth in the hands of a tiny minority is fracturing our society, weakening our economy and giving disproportionate power to the richest. Unless policy-makers adopt a clear goal of reducing the gap between the richest and the rest, they will have to govern an increasingly dysfunctional nation.”
The report also highlighted the ongoing gender gap, with inequalities between men and women regarding who owns the most homes, pensions, cars, stocks and shares. The average value of men’s total pension wealth was nearly twice as high as women’s in 2010/12; £63,000 compared with £34,800.
A new report from Age UK also found high proportions of poverty among the elderly in Wales, with 1 in 6 pensioners living in poverty. The report also tells shocking tales of life on a low income, with one 91 year old woman forced to dry toilet paper on the radiator so she could reuse it, and surviving on just a couple of boiled potatoes a day.
As Oxfam and the Equality Trust state, it is evident that policy-makers MUST begin to take poverty seriously, and address issues such as the cost of living crisis, fuel poverty, low-paid employment and zero hour contracts, housing shortages, extortionate rent prices, and reconsider changes to welfare such as the bedroom tax, which have had a detrimental impact on inequality.
As well as the economic impact of a country with high levels of inequality, there are also a range of other problems outlined by Pickett and Wilkinson, including higher levels of illness and violence, drug addiction, mental illness, obesity, loss of community life, imprisonment, unequal opportunities and poorer well-being for children. In addition, the effects of inequality are not just confined to the poor; research shows that inequality damages the social fabric of the whole society – a phenomenon they name ‘The Spirit Level’.
Pickett and Wilkinson suggest that as well as reducing levels of economic inequality, the government must begin to realise that taking measures to reduce inequality is about improving the psychosocial well-being of the whole society; a matter which surely cannot be ignored.