Published today: ‘Rainy Days’, our new audit of wealth in Great Britain: how it was distributed before coronavirus and how the crisis is affecting families’ balance sheets. This launches a new 3-year partnership with @standardlifefdn. resolutionfoundation.org/publications/r… 
The context for the report is the huge rise in the total amount of household wealth from 4 to 7 times national income. With so much more wealth around, its distribution and the way it affects living standards is critical, particularly as we face the coronavirus crisis.
Wealth inequality is very high – twice as high as income inequality – as measured by the Gini coefficient – but on this measure the UK does not stand out compared to other countries.
Looking at how it is shared across the wealth distribution, the richest tenth of families have nearly half of all net wealth…
…but it is the gap in pounds that really stands out: Britain has some of the biggest absolute gaps between rich and poor.
The economic crisis caused by coronavirus has put the gaps between wealth ‘haves’ and ‘have-nots’ in sharp relief. A typical worker in a shut-down industry had family savings of just £1,900 per adult, two-and-a-half times less than those able to work at home in the crisis.
Families with more savings pre-crisis were better able to cushion any hits to their income when the lockdown hit. And, although the income hits were evenly spread across the income distribution, the knock-on effect on rates of saving has been worse for low-income families.
A consequence of lower-income families having fewer savings to fall back on during the coronavirus crisis is that many have taken on new debt. Lower-income families have also taken on more of the higher-cost types of debt, like overdrafts and credit purchases.
3 policy takeaways?
1) Jobs + pay matter, but understanding the crisis-hit to family finances is crucial,
2) Lack of low-income family savings highlights the need for a strong safety net,
3) If the crisis widens wealth gaps, policy will need to address this.
1) Jobs + pay matter, but understanding the crisis-hit to family finances is crucial,
2) Lack of low-income family savings highlights the need for a strong safety net,
3) If the crisis widens wealth gaps, policy will need to address this.
