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Despite the standstill economy, households across the UK became richer than ever last year, due to a recovery in financial assets. This sent net household wealth across the country past the £7 trillion barrier for the first time, a new study reveals…

The surprise findings, suggesting that the UK is gradually emerging from the downturn, show household wealth has surged 62 per cent over the last decade thanks to the ballooning value of deposits and pensions, sending the estimated value of UK household net wealth to £7.05 trillion for the end of 2012.

According to a report in City A.M., The rate of increase over the decade has outpaced both the rate of household’s gross disposable income (44 per cent) and the price of consumer goods (29 per cent). UK households are now worth £255,502 on average each, with households £86,000 wealthier than they were a decade ago, the survey from Lloyds TSB Private Banking reveals.

With house prices contributing less to the figures since the market downturn in 2007, financial assets have helped cushion the fall by contributing 63 per cent to the overall increase in total household wealth over the past ten years.

Nitesh Patel, Lloyds TSB Private Banking economist, said despite household wealth growing by an estimated £2.7 trillion over the period, a gap had been created between the wealthiest household and the rest.

“The wealthiest 10 per cent of households hold 22 times more wealth, on average, than those in the bottom half,” he said, “…although many of the wealthiest are older individuals who have had a much longer time to accumulate their wealth holdings, as well as to reduce their debts.”

UK pension values have grown an estimated £1 trillion since 2002 and deposits have grown £476bn.

Despite a rebound since the crisis – wealth grew £479bn between 2007 and 2012 – this was a sharp slowdown compared to the growth between 2002 and 2007, when wealth grew £2.23 trillion in just five years, with slower increases in the value of financial assets and almost no expansion in housing wealth.

Net housing equity – the value of UK houses minus the mortgages owed on them – grew from £1.89 trillion to £2.89 trillion between 2002 and 2007, but only edged up to £2.91 trillion by 2012.

Net financial wealth, like pensions and savings, soared from £2.45 trillion to £3.68 trillion between 2002 and 2007, but only grew to £4.14 trillion by 2012. The figures also come before adding in the effects of inflation – prices rose 17.5 per cent between 2007 and 2012, dwarfing the 7.3 per cent wealth gain.

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