• Wealth is a stock of assets that have a financial value
  • There is marketable wealth and non-marketable wealth
    • The former is wealth that can be transferred to another person, e.g. a house or shares
    • The latter is specific to a person and cannot be transferred, e.g. pension rights.
  • The distribution of wealth can be considered in terms of:
    • How it’s distributed amongst the population (size distribution)
    • The forms in which it is held
    • The characteristics of those holding wealth

The Size Distribution of Wealth

  • Wealth is very unevenly distributed amongst the UK’s population

Wealth Distribution Between Assets

  • Wealth can be held in forms such as life insurance, pension funds, shares, etc.
  • Some forms of wealth, such as life insurance and pension funds are more evenly distributed than things like shares and land

Wealth Distribution Between Different Groups

  • People can become wealthy through inheritance, saving, and using their entrepreneurial skills
  • Wealth is unevenly distributed between age categories, but it is to be expected; people in their 40s and 50s have had more time to accumulate savings than younger people, and so have greater wealth
  • Wealth also varies between ethnic groups; men have more wealth than women, etc.

Causes of Wealth Inequality

  • Inequality of income
    • Work overtook inheritance as a source of wealth in the UK
    • Having a high income makes it easier for people to save, and so gain higher interest rates on their savings.
  • Differences in entrepreneurial skills
    • Some people are self-made millionaires as a result of building up a business
  • The pattern of inheritance
    • In the UK, wealth has traditionally passed down to the eldest son, and hence kept wealth in the hands of the few
    • In other countries where the property and other assets are distributed amongst the children, wealth is more evenly distributed over time.
  • Marriage patterns of the wealthy
    • The wealthy tend to marry other wealthy people, and this further concentrates wealth in the hands of the few.