Thread by @TorstenBell

Such an odd crisis: what comes alongside the biggest GDP fall in 300 years? A wealth boom. Here's a breakdown of whose wealth has been booming... 🧵

The anatomy of the Covid wealth boom:
Savings up £200bn +
Debt down £10bn +
House prices up 8%
= total UK wealth up by £900 billion to £16.5 trillion.

What's going on? Two unrelated effects. First the direct impact has seen the usual wealth falls for those losing their jobs (hugely unusually) outweighed by Covid restrictions = big spending falls for higher income households = lots of savings

But the second effect is even bigger: asset price rises have seen the wealth of those who already had some surge in value. For the UK that is mainly about housing but elsewhere (e.g US) shares have also boomed

For the first time we've combined the effects of spending falls and asset prices surges to see who this wealth boom has overall benefitted...

This wealth boom is a big - but very unequal - deal. The typical adult has seen a £7,800 windfall - but the average increase is just £86 for the poorest 30% vs over £50,000 for the top 10%. The middle have done best in terms of %⬆️because they are most reliant on property

So £ wealth gaps have risen AGAIN - the gap between the middle and wealthiest 10 per cent has increased by £44,000 mid-crisis (on top of a £350,000 increase in the pre-crisis decade). It's these wealth gaps that are redefining who does/doesnt feel like the country works for them

This is very much continuing the pre-crisis trend of wealth gaps rising because household wealth is rising so much faster than income (note it's the growth in household wealth NOT rising wealth inequality that is doing the work here)

For a lot more detail on this comprehensive take on what the pandemic has done to household wealth read our annual Wealth Audit - out today from @jackhleslie @krishansays - with the kind support of @standardlifefdn resolutionfoundation.org/publications/w…