A booming City and rising house prices provided a double boost to Britons holding assets in 2016 as they pushed the nation’s wealth through the £10tn mark, according to a new survey. Lloyds Bank’s private banking arm said total household wealth in the UK increased by £892bn last year – with the property and financial markets each responsible for half the rise.
News of the 9% jump in the value of the assets from £9.6tn to £10.5tn during 2016 is likely to rekindle the debate about the UK’s wealth inequality. Previous surveys have shown that a tenth of adults own half the nation’s wealth, while 15% own nothing or have negative wealth.
The Bank of England has acknowledged that the richest 10% of Britons gained most from the money creation programme known as quantitative easing, since the increase in the supply of credit boosted demand for financial assets. Since the better off held a greater proportion of these assets, 40% of the gains of rising share and bond prices went to the richest 5% of households.
For more details: https://www.theguardian.com/business/2017/aug/08/total-uk-wealth-city-property-homes-inequality-saving
In a separate report released on Tuesday, the Social Market Foundation said more than 14 million working age adults were not saving at all, and more than 26 million adults did not hold adequate rainy day or pension savings.
More details: http://www.smf.co.uk/millions-not-save-money-missing-billions-pounds-keeping-money-cash/
So 2016 was another year when the rich got richer and those on low and middle incomes find themselves for ever struggling to make ends meet. This continues a trend that has been going on for many years now. It is a perilous one, stocking up social discontent. People can see that it was tax payer’s money that got the bankers off the hook during the credit crunch of 2008 and all that quantitative easing money (some £450bn) did nothing but help the rich get further.
What else was 2016 famous for? Of course Brexit. The referendum itself was an ill-thought idea by David Cameron believing that he would easily win it to silence the right wing of his Conservative party. But it backfired badly despite the fact that the Brexiteers told blatant lies such as our EU contributions of £350m would go into the NHS and playing on immigration fears that now we know are in the main unfounded.
I believe that a very big reason for the Brexit vote was the underlying social discontent. People are working harder than ever, yet in real terms they are poorer than ever. They see that the system is awash with money that is more than ever accumulated by the few, while they are Just About Managing (the JAM families?). They wanted to vent their anger on a system that is failing them, hence a large number of them voted to exit the EU. It was an anti-establishment vote.
In my own personal opinion, Brexit is a grave mistake, but I fully understand why the vote went that way. It should really be a wakeup call to start remedying the economy so that it works for everyone.