Wealth gap remains unequal

24 Mar 2015 11:42 AM

New reports highlight data on wealth inequality and attitudes to poverty.

The least wealthy 30 per cent of households have no savings or pensions according to new analysis.

Wealth and Assets in Scotland 2006-12, published by the Scottish Government, shows that in 2010-12 the least wealthy 30 per cent of households owned just two per cent of all personal wealth, mainly property and personal belongings.

The report coincides with publication of Scottish Government research, Public Attitudes to Poverty, Inequality and Welfare in Scotland and Britain, which shows 83 per cent of Scots thought the gap between those on high and low incomes was too large.

Wealth and Assets also shows:

• Two per cent of households owned 17 per cent of all personal wealth in Scotland;
• 10 per cent of households owned 44 per cent of all private wealth in Scotland, the same percentage as for Great Britain;
• In comparison, the least wealthy half of households in Scotland owned only nine per cent of private wealth;
• The least wealthy were more likely to be single adults and lone parents;
• Almost half of the least wealthy households were headed by someone in employment.

Social Justice Secretary Alex Neil said:

“The Wealth and Assets survey highlights the vast inequality that still exists in Scotland. It’s not right that the wealthiest 10 per cent of households have 20 times more wealth than the least wealthy 30 per cent.

“The poorest households have very few financial assets like savings or pensions, while a job is no guarantee of gaining wealth or the security that comes from it.

“We need concerted action to tackle inequality, yet even the UK Government’s own analysis shows that households with the lowest incomes are bearing a greater burden from public spending cuts – an astonishing admission that austerity is hitting the poorest the hardest.

“We have put tackling inequality at the heart of our Government. We want to raise educational attainment for the most disadvantaged and see a fifth of university entrants coming from the most disadvantaged 20 per cent of society by 2020. To help those on low incomes we have frozen the council tax, expanded childcare and replaced income lost through the bedroom tax or council tax benefit cuts. We pay the living wage and encourage employers to follow suit.

“New research shows that four out of five people think the gap between those on high incomes and low incomes is too large. It also finds limited knowledge of poverty levels and negative attitudes to people who claim social security benefits. So we will shortly appoint an Independent Adviser on Poverty and Inequality, to raise awareness of the realities of living in poverty and to make recommendations to Government on how we can work with partners to break the cycle of poverty.”

Notes To Editors

Wealth and Assets in Scotland 2006 – 2012: http://www.gov.scot/Publications/2015/03/2333

Public Attitudes to Poverty, Inequality and Welfare in Scotland and Britain:http://www.gov.scot/Publications/2015/03/2695

Wealth and Assets in Scotland 2006-12 shows that aggregate total wealth of private households in 2010/12 stood at £714 billion, made up of:

• pension wealth (occupational pension schemes and personal pensions) £302.5 billion, or 42 per cent;
• property wealth (value of property minus mortgage property debt) – £227.5 billion, or 32 per cent;
• physical wealth (the value of items such as cars, household goods and jewellery) – £96.7 billion, or 14 per cent;
• financial wealth (the value of savings and investments minus non-mortgage borrowing or debt) £87.2 billion, 12 per cent.

Other Wealth and Assets Survey findings show:

• Half of all households owned less than one per cent of financial wealth, less than three per cent of pension wealth, six per cent of property wealth, and 20 per cent of physical wealth.
• There was a slight reduction in inequality of total wealth in Scotland between 2006/08 and 2010/12, driven mainly by a fall in the value of pension wealth owned by the wealthiest, rather than increases in ownership by the least wealthy households.
• Financial wealth was the most unequally distributed - the wealthiest 10 per cent of households owned almost three quarters of all financial wealth in 2010/12, while the least wealthy 30 per cent of households had no financial wealth.