This paper explores the implications for public policy from the new Office of National Statistics (ONS) data source on wealth distribution in Britain, and what we know about future trends in savings, longevity, property prices and inheritance.
The case for having a greater policy emphasis on wealth – as opposed to simply focussing on income – is that a household’s wealth at a given point in time is often a better indicator of its economic wellbeing. The ONS has now made this point explicitly, stating in July 2014, that “it is important to consider both wealth and income when assessing the economic well-being of households”. Yet the policy implications are under-explored.
Using the relatively recent data source the paper describes the current distribution of assets in Britain. It then explores how this might be expected to change in future years given what we know about longevity, inheritance patterns and other demographic and policy changes. Finally we draw out implications for the public policy debate focussing primarily on intergenerational transfers including inheritance, as well as issues relating to housing and consumer debt.