Family wealth growing at a much faster rate than income is at the heart of UK inequality, a wide-reaching new study has found.
The Institute for Fiscal Studies documented how economic inequalities have changed in the UK over the last 60 years, finding that household wealth is increasingly becoming the number one factor driving the rich/poor divide.
Researchers found that those who already had wealth have seen it rapidly rise, whereas a long-term stagnation in wages means those without it can no longer expect to see their living standards greatly improve as they age.
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“The fact that we can no longer be sure that the young will grow up with living standards that match their predecessors is a remarkable social change”, said Robert Joyce, deputy director of IFS.
“A generation of Britons has ridden a wave of growing asset prices, pushing up the value of their houses and investments. Meanwhile, more than a decade of stagnant earnings has held back younger generations for whom earning their own economic success has become increasingly difficult”, he continued.
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