15th May 2015
Rising property prices and stockmarkets means average household wealth has risen almost £50,000 in a year, the fastest increase since records began.
Analysis by Lloyds Private Banking showed household wealth at the end of 2014 reached £9.1 trillion, an increase of 19%, or £1.5 trillion, in a year – the largest increase since the bank began recording household wealth.
The average household has seen their wealth increase £48,700 over the same period to reach £326,414.
The rise has been helped along by a combination of property price increases and the rising value of other assets, such as stockmarket investments and pensions. House prices rose 9% over 2014 and contributed an estimated £452 billion to the overall increase in wealth, or one-third of the total rise.
The value of financial assets, such as savings accounts, government bonds, shares, life assurance and pensions, increased by nearly £1 billion, helped by a 20% rise in UK gilt prices during 2014.
Over the past decade, the average household has seen their total wealth rise to £126,572. Between 2004 and 2014, households have seen their combined wealth grow 75% from £5.2 trillion to £9.1 trillion.
Housing now accounts for 39% of total wealth, compared to 45% in 2004, with financial assets now accounting for 61% of wealth, up from 55%.
Mark Stadlmann, chief executive of Lloyds Bank Private Banking, said: ‘Since 2004, substantial growth in the value of the housing stock and financial assets has boosted net household wealthy by close to £4 trillion.
‘A booming housing market up to 2007 coupled with the rising value of households’ financial assets held and a growing number of older households are the key drivers.’
However, while the average household wealth is £326,414, there is a significant gap between households.
The Office of National Statistics show there is a widening divide between the wealthiest and least wealthy households. In 2010/12 the wealthiest 20% of households had 105 times more total wealth than the 20% least wealthy households. In 2008/10 this figure was 92 times.