More Brits become millionaires

By Kevin Peachey
Personal finance reporter

image source, Getty Images

The number of British households that could consider themselves as millionaires rose by nearly a third in two years, official figures show.

A total of 3.6 million households in Britain held wealth of more than £1m by June 2016, up 29% in two years, the Office for National Statistics said.

Wealth includes pension savings, investments, belongings, and property values less any outstanding mortgage.

Campaigners argue that the figures expose wealth inequality.

The median wealth per British household, after borrowing is taken into account, was £259,400 by July 2016.

This was 15% higher compared with two years earlier, the official figures show. The figures do not account for the rising cost of living over that time.

Spreading wealth?

The figures show the amount of wealth held by each of Britain's 26 million households as a whole, irrespective of whether there is one or several occupants.

While the wealth of those at the top end of the scale has risen, driven by the growth of private pensions and property values, those at the other end have suffered a fall over the same period.

The poorest fifth of households, less likely to own a home or a private pension, saw their wealth diminish. For the bottom one in 10 households, that meant a typical fall of £3,000 to £32,000.

Conor D'Arcy, senior policy analyst at the Resolution Foundation, which lobbies for low-income groups, said: "Britain is very good at generating wealth, but terrible at spreading it around the country and even worse at taxing it properly. As a result, we have unacceptably high levels of wealth inequality.

"Young people in particular are feeling the effects of Britain's wealth divide. Our large millennial generation own just 2% of the nation's wealth. This stems from their struggle get on the housing ladder, boosting other's people wealth in the private rented sector, rather than build assets of their own."

The data does show that there was little change in the proportion of wealth held by those at the top and those at the bottom over the period covered by the figures.

What made people wealthier?

The key factors behind the rise in wealth has been more people seeing their pension pots expand, as well as the rise in property values.

There was a 20% rise in private pension wealth by July 2016 compared with two years earlier, to £5.3 trillion, primarily the result of workplace final-salary pensions growing in value, or amid pensions already being paid to those who are retired.

This total was slightly ahead of the 17% rise in property wealth, which grew to £4.6 trillion over the same period.

This increase in property wealth was reflected in the regional breakdown of wealth. Median net property wealth in London was £351,000 by June 2016 - a third higher than two years earlier.

There were signs of Londoners choosing to put money into a deposit for a home, rather than into savings or shares. The amount of financial wealth in London fell the sharpest compared with other areas of Britain.

Median household total wealth, which includes everything from cars to cash, was highest in the South East of England at £381,000 by June 2016, followed by the South West of England (£336,000).

The lowest was in the North East of England, with median household wealth of £163,000.

More on this story