Increasing pension wealth has driven the numbers of millionaires up in Britain by a third figure from the Office for National Statistics (ONS) has shown. The findings are based on figures from the nationwide Wealth and Assets Survey which is collected on a two-year rolling basis through interviews with over 20,000 households across the UK.
The survey shows that the overall average wealth in the UK rose by 15% to £259,000, although this does not take into account the rising cost of living. As part of this, private pensions saw an increase in value to £5.3 trillion, a 20% rise over the past two years and they now represent 42% of the total household wealth in the UK. This rise is bigger than the rise in property wealth which saw a rise of 17% over the same period and is now worth a total of £4.6 trillion.
Equalisation of pension wealth
The distribution of pension wealth has also become more equal. In 2006-2008, the top 10% of households with the most pension wealth held 54% of all private pension wealth, whilst 50% of household with the least held just 6%. However, according to the new figures, the top tenth now hold 46% and the bottom halves holding has now risen to 7%.
Auto enrolment has been one of the drivers behind both the increase in pension wealth and the rising equalisation of pension wealth. According to the latest ONS figures (2014-16), 49% of people aged 16 to 64 years had some form of active private pension that they were contributing to, up from 44% in the previous period. With many smaller businesses still yet to auto enrol their staff, these figures should increase over the next few years.