To question the current wealth distribution in the UK

[1DAD2KIDS]

The number of British households that could consider themselves as millionaires rose by nearly a third in two years, official figures show. Yet last time I checked we were still in austerity and everyones finances where stagnating or going down. Now I know this is a simplistic view but surely as more people get wealthy you'd hope some of that money would work it's way down? So most people are getting poorer yet some are getting richer in this country. What is going on, smells fishy?

More Brits become millionaires - www.bbc.co.uk/news/business-42904875

Is that. Ot to do with house prces

I'm guessing that rise reflects people that bought a family home in a decent area that has massively gone up in value. Unless they move to a much cheaper area, this wealth doesn't really compare to our traditional idea of what being a millionaire means.

It's intresting that the article does say that the wealth of those at the lower end of the scale has continued to fall. So I guess the gap is getting bigger between the haves and have not's? Although granted this may not be wealth all in hard cash it does identify a growing disparity.

I suppose this will really kick in when people die. Some people will inherit great wealth to add to their pot and pass down to the next generation. Some people will inherit nothing and will not have the same leg up and nothing must to pass to next generation. Unless of course the selfish baby boomers contact one of those equity release company's, receive a free Parker pen and spend it all on sunny cruises.

Trickle down was always a lie

inequality is rising
HMRC data bear it out clearly

It's to do with house prices rising. On paper dh and i would now just about tip into the millionaire category - in practice he's got an ok job (40% tax bracket but no where near £100k) and I'm a sahm.

We're definitely not poor (as in i can turn on the heating when its cold, we have enough money for food, etc) but neither would i consider us to live an extremely affluent lifestyle.

All the cash is tied up in bricks and mortar. My house has increased by about 60%, he bought his in the late 90s so has gone up even more. It's not cash we can spend unless we take out equity which we don't want to do

House prices have NOTHING to do with the increasing inequality
its to do with the rise of the rentier economy
the mismatch of tax on capital versus income
and the lax oversight of offshore wealth

The wealth is merely an illusion, housing is a very illiquid market. The valuations are merely that, only around 4 percent of housing stock is bought or sold per annum.
The market has been propped up beyond recognition, how long it can last is the question. Housing now appears to have negative political capital and quite rightly so. It is no coincidence that the government are looking to tap into this unearned wealth for care fees etc. It is ridiculous that a persons house was making more than they earned at work.

@TalkinPeace I have a complete MN crush on you With economics you always get right to the heart of the problem, and express it so clearly - I spend my time thinking, "yes, what she says" and wishing I was as articulate

I've just realised that comes across as slightly creepy I was intending it to be a non-creepy but heartfelt compliment

And yep, Talk has nailed the issue imo

A lot of that (for the average range person) will be locked up in equity and pensions. Then of course you need to add the increasingly wildly wealthy into the mix to up the average.

70% of our wealth is in pensions (we are mid forties), 20% in equity (mortgage free home) and just 10% in investments/savings (which we won't touch unless there is a very rainy day/we're retired/give DC a house deposit when they are older).

Hefzi
Thank you for the compliment. Taken in the way truly intended

My job is "cutting to the chase" and I have to read around a LOT ready to argue the toss with politicians at any moment

Inequality hasn't actually changed that much in the last 10+ years. But it's spoken about more when it is part of a 'nasty Tory' rhetoric. The house price boom of the early 00s was an example of this.

Despite some continued rise, the improvements in pensions (and the numbers with private provision) is an important off-setting factor

But you could argue that both future pension and future house price when you sell are both somewhat hypothetical and in the short-term essentially illiquid.

(I though they could always take value of house, for care fees, and the Tory policy that got thrown out was a limit to the amount that could be taken)

Inequality hasn't actually changed that much in the last 10+ years.
Do you have a link for that
because the HMRC data does not agree with your assertion

the top 0.1% in the UK are not worrying about houses and pensions
they are rich - as in bling rich

Lewis Hamilton saved £3m by registering his private jet in the Isle of Man after all

So is the problem (clearly I'm no ecomomist) it's not a lack of money. More that it's bottle necking in the hands of a few and getting locked up rather than spent and/or paid in taxes?

Panama papers.

The rich get richer and the poor get poorer unless you have socialist government. Given how non-socialist 'new' labour were when they were in power we haven't had a socialist government for years.

Of course if you have an incompetent socialist government then the whole economy collapses and everyone gets poorer.

Perhaps a benevolent dictatorship with TalkingPeace in charge?

I am always a little surprised that people are surprised, inequality in general has grown and is growing globally, not just the UK, at least since the 80s, it has actually reached obscene proportions

and the lax oversight of offshore wealth

People say, "Oooo, if we ask them to contribute more, they will take their money to another country!"

They already are.

It's simply an anaylsis of the data that came out this week and it's forerunners. So no need to link as we're working off the same thing.

I'm not saying that there is no inequality, or making any comments in fairness or desirability of current systems.

Just observing that the changes to distribution of wealth are not simply increasing inequality, even though that is a narrative adopted by some. The stats show an increase in number of people with pension savings as well as the inevitable house prices. One factor is more talked about that others.

I wasn't intending to get into the minutiae here - Just going to say that these stats don't really confirm an increase rather a continuation of much the same levels, but with some change to the nature.

On a number of subjects, if people read only MN, then it would seem there was only one possible interpretation and anyone who doesn't agree must be deluded/ill-informed/deliberately obtuse/just derailing etc. This is not the case.

And I suspect it's why the report didn't make much headway in the news. Because despite the figures sounding gasp-worthy (a small number of 'haves' having a huge proportion), it's not saying anything new, and the gap has been enormous all century.

I'm fairly left wing in my leaning (especially in my trade unionism). But I never think hard line socialism is the way forward. It conflicts with my liberalism. I don't think capitalism has to be evil or overly greedy. But the trouble is where do you find the compromise? And how do you encourage/program the 1% to keep the cash circulating around the system and into people's pockets and public services? Having wealthy people I don't have a problem with, it's the excess hoarding of wealth and those that are abused to amass said wealth.

Much of it is money you can’t access. Final Salary Pension funds for example are valued at 20 x the income you will receive so if worth £15k a year it is valued at £300k. There will be some people in this millionaire category who won’t have a pot to piss in now but will be ok when they retire or downsize.

The Joseph Rowntree Foundation has an excellent website for exploring this sort of thing:
www.jrf.org.uk

This book in the implications of the concentration of wealth was really eye opening for me. I lose track of whether the figures show a continuing increase.
books.google.co.uk/books/about/Inequality_and_the_1.html?id=SyvArQEACAAJ&redir_esc=y&hl=en

There will be some people in this millionaire category who won’t have a pot to piss in now but will be ok when they retire or downsize. I would argue they do very much have a pot to piss in, a nice big shiny jewel encrusted folder one. For example say they have a house worth 900K and pension of 20k per year. They sell the house, buy one a nice one at 300k and a good car. I think most average people would say a 250k house, nice car, half a million in cash and 20k (although I assume they'd probably have a bigger pension pot) is a pretty sweet retirement and consider them rich.

CJD7263 slightly miss read you. I think we are in agreement there.