Wealth & assets

Before the fall

The distribution of household wealth in Britain and the impact on families

8 October 2025

This report is the fourth in our series of ‘audits’ of households’ wealth, offering the most comprehensive assessment of wealth inequality in Britain. It comes against a backdrop of an unprecedented mix of economic shocks and policy interventions during the Covid-19 pandemic and its aftermath which have had profound effects on family finances.

This report draws on new data from the Wealth and Assets Survey (WAS), covering April 2020 to March 2022, to provide a comprehensive analysis of the effects of the pandemic on household balance sheets. We also use new data to explore the extent to which people move up and down the wealth distribution, shedding new light on the persistence of wealth inequality.

Key findings

Britain’s stock of household wealth continued to grow during the pandemic, reaching nearly 7.5 times GDP, up from around three times GDP in the mid-1980s.
As total wealth has grown, so have gaps between the wealthy and the less wealthy. The absolute real wealth gap between average family wealth per adult in the top wealth decile and those in the middle (fifth decile) reached £1.3 million in 2020-22, up from £1 million in 2006-08.
Larger wealth gaps make it harder for those lower down to climb the wealth ladder: in 2006-08, the gap in average wealth per adult between the top and middle decile was equivalent to around 38 times typical full-time earnings. By 2020-22, this had risen to 52 times.
The generational wealth gap also widened, with the difference in typical wealth between those in their early 30s and early 60s reaching £310,000 in 2020-22, more than double the £135,000 gap in 2006-08.
Higher-income families saw much greater improvements in their balance sheets compared to low-to-middle income families during the pandemic: the typical family in the lowest-income quintile saw their liquid savings increase by just £80 over the pandemic period (2019-20 to 2021-22), while those in the highest income quintile saw their liquid savings increase by £4,200.
Higher-income families were also more likely to see large reductions in debt during the pandemic, with a quarter of families in the top two income quintiles reducing debt by £2,000 or more.
Overall, people’s position in the wealth distribution tends to be sticky, with most people moving no more than one decile above or below their starting position over a four-year period.
Low-to-middle income families are less likely to experience upward mobility: almost half (45 per cent) of people from higher-income families moved up the wealth distribution at least one decile between 2016-18 and 2020-22, compared to only 40 per cent among their low-to-middle income counterparts.
Major life events strongly influence movement within the wealth distribution. Becoming a homeowner, entering employment, and – unsurprisingly – receiving an inheritance all have a positive impact on wealth mobility.

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