Inequality in the UK has reached staggering levels, as the combined wealth of the richest 50 families surpasses that of the bottom 50% of the entire population.
The recent release of the annual Sunday Times Rich List (STRL) has sparked a national conversation on wealth inequality, as the concentration of vast fortunes in the hands of a few continues to grow.
The list reveals the combined wealth of the UK’s top 350 individuals amounts to a staggering £709.96 billion. This sum, equivalent to approximately £36,595 for every family in the UK, highlights the highly concentrated nature of wealth in this country.
The shift in wealth distribution has affected the rich as well as the poor. In 1989 when the Rich List was first published, the Queen held the top spot. In 2023, King Charles has dropped to 263rd place, overtaken by an elite group of business magnates, aristocrats, and celebrities. All of these have ascended to unimaginable heights of affluence.
Wealth concentration reaches unprecedented levels
A study, undertaken by the University of Greenwich, utilises a unique dataset compiled from archives of the Rich List from 1989 to 2023. Its final report sheds light on the wealth of the country’s richest households, often overlooked by other sources of data. It shows wealth concentration in the UK has reached staggering levels, revealing startling disparities, and highlights the urgent need for action.
A comparative analysis with the Office for National Statistics’ Wealth and Assets Survey (2018-2020) reveals that the richest 50 families have a combined wealth of £466bn. This figure surpasses the total wealth held by the bottom 33 million of the population.
Wealth inequality has soared over the last decades
Since the inaugural publication of the Rich List in 1989, wealth inequality has experienced a significant and alarming surge. In 1989, a wealthy individual on the Rich List possessed 6,000 times the average person’s wealth. Today, this gap has widened to a staggering 18,000 times, underscoring the magnitude of the disparity.
Rising wealth inequality persists amidst COVID-19 and cost-of-living crisis
Contrary to expectations, the COVID-19 pandemic and the ongoing cost-of-living crisis have failed to curb the growing wealth inequality in the country. In fact, over the course of the pandemic, the wealthiest 200 families listed in the Rich List have witnessed a substantial 22% increase in their wealth. Just this surge alone could provide every family in the country with an additional £9,000.
Super-rich flourish as the government struggles financially
In the early 1990s, the wealth of the UK government was much larger than the wealth of the richest 200 families. However, Figure 2 shows that while their fortunes grew from £42.4bn in 1989 to £622.7bn in 2021, an increasingly impoverished public sector has shrunk from £341.5bn in 1989 to -£1,300.2bn in 2023. Privatisation efforts, relatively low public investment spending and bailouts, necessitated by the financial sector in 2008 and COVID-19, have led to a concerning trend. The government’s liabilities now exceed its assets by £1.25 trillion. This marks the poorest financial state it has experienced in the past 30 years.
Wealth inequality projected to outgrow the economy
If no measures are taken to address the issue, wealth inequality is forecast to exacerbate in the future. Since 1989, the wealth of the richest 200 families has grown by 11.6% a year (or 8.7% when taking inflation into account). This is far higher than the entire UK economy, or Gross Domestic Product (GDP), over the same period. At the current growth rates, the combined wealth of the top 350 people listed in the Rich List is expected to surpass the UK economy’s GDP by 2035.
The rate of this wealth increase compared to GDP shows that it hasn’t ‘trickled down’ to the rest of the economy. In fact, as seen in Table 1, the relationship is the opposite – with GDP growth slowing.
Questioning the system
These figures raise questions about the kind of system we have, that over the last three decades, has not only perpetuated, but accelerated the stark wealth disparity. We live in a society in which a small group of individuals has been able to amass unimaginable fortunes while food bank usage has never been higher, families are struggling to put food on the table, and four million children are living in poverty.
The public sector, which plays a vital role in ensuring the welfare of society, finds itself in a dire financial situation, so public services suffer and fail to help those who need them most. Meanwhile, in the private sector, CEOs and executives are being awarded record-breaking salaries and bonuses, while full-time employees have endured the longest pay squeeze in more than 200 years – with average pay 5.9% lower than in 2008, when adjusted for inflation. This dynamic perpetuates a cycle of inequality, where the rich get richer, while workers are, in real terms, getting poorer.
Taxing the wealthy as a viable solution
Perhaps unsurprisingly, raising taxes on the wealthy and closing tax-avoidance loopholes is gaining popularity as a potential solution to combat rising wealth inequality. The research suggests that taxing just half of the annual increase in wealth of the richest 50 families would generate enough revenue to provide all 5.5 million public sector workers with a pay rise of 10.5%, thereby preserving their standard of living.
The findings of this report paint a troubling picture, raising ethical questions about how such extremes persist. It should prompt a critical examination of our economic and social structures. Urgent action is required from policymakers to address this growing issue and prevent further exacerbation of wealth inequality, ensuring a more equitable distribution of resources in the future.