Changing Society Briefing 5: The rise in wealth, income inequality and the rise in poverty, especially child poverty
- Joe Saxton
- May 29
- 4 min read
Introduction
This is the fifth in the Heyheyjoe briefing series, looking at external social, economic, and demographic changes and their impact on charities and non-profit organisations. This one focuses on wealth, poverty, and income inequality.
Wealth inequality in the UK is pronounced.
The wealth distribution in the UK is very unequal. As chart 1 shows, around 17% of the population have a wealth of around a net £100k or more (value of assets less value of debts), while around 26% of the population have a wealth of under £500 or are in debt.
Chart 1: Net household wealth by levels of assets
This wealth inequality is not similar across all demographic or geographic sections of the population. The wealthiest segment is the retired, and the poorest are the youngest, especially children. Wealth is not evenly distributed geographically either. The south-east has a median household wealth of around £490k, while the north-east has a wealth of around £179k (both from the same source as chart 1).
The wealth of the richest 1% in society is increasing.
A recent Joseph Rowntree Foundation report summed up the difference between rich and poor in the UK, and how it has increased:
‘Wealth inequality is high and rising and more marked than income inequality. In the UK, the bottom 50% of the population owned less than 5% of wealth in 2021, and the top 10% a staggering 57% (up from 52.5% in 1995). The top 1% alone held 23% (World Inequality Lab, 2022). The ratio of wealth to income has risen in the UK from 2.3 to 1 in 1948, to 5.7 to 1 in 2020 (in Savage et al., forthcoming).’
The wealth of the very richest billionaires is also rising.
The wealth of the top ten richest families in the UK has risen dramatically since the financial crisis of 2008. Statista report that the cumulative wealth of the top ten billionaires in the UK has grown from £47.7 billion in 2009 to £182 billion in 2022 - an increase of 281% (https://www.statista.com/chart/27505/uks-richest-are-getting-richer/ )
Child poverty and working-age poverty are rising.
Poverty is very much influenced by household structure in combination with age and life stage. Chart 2 shows the poverty rates of different groups over time. What is interesting to see is that while poverty for pensioners has halved since around the year 2000, most other groups are either static (working age adults with children) or increasing (working age adults without children). It is depressing to note that children have the highest level of poverty of any of these groups. Chart 3 shows more detail about the poverty rates of different households.
Chart 2: Poverty rates for children, pensioners, and other groups over the last 20 years.
The implications for charities
There are two broad and very different implications of these changes. The first is that there are likely to be increasing numbers of people who rely on charities or need charities for their advice and guidance. The second is that as wealth increases in the richer part of society then there are opportunities for fundraising from the segments of society who have an increasing amount of money.
The work of those tackling poverty and social issues is growing since Covid and the cost of living crisis.
Chart 3 shows the poverty rates for different households. Lone parents have a poverty rate of a staggering 44%, while 30% of children overall are in poverty, and even working-age single people without children have a poverty rate of 24%, or nearly a quarter. And it’s worth noting how we saw the number of single people has increased greatly in our 2nd briefing, and more single people means more poverty. Child poverty fell from 1994 to 2004 and stayed static for the next 15 years or so. However, it has risen since Covid and the cost of living crisis.
Chart 3: poverty rates in different household type
There is more wealth for fundraising and the demographic targets are clear.
Chart 3 shows the opportunities as well as the challenges. Just 13% of ‘pensioner couples’ are in poverty, and just 13% of ‘working couples without children’ are in poverty. Indeed, pensioners overall have a low rate of poverty compared to other groups, and this is something which the ‘triple lock’ and the voting power of pensioners is likely to maintain. These wealthier segments represent real opportunities for fundraising team to target for donations, and especially for major donations. The demographics appear relatively simple for fundraisers:
· target couples,
· target old people,
· target those without children!
Joe Saxton
May 2025
This briefing is part of a series looking at the impact of social, economic, technological, and demographic changes on charities and non-profit organisations. We have already published a briefing on the ageing population (briefing no 1) and changing numbers of single people and fertility rates (no 2), and the impact of growing government debt (no 3). And most recently in April no 4, the rise in Government debt. In future issues we will look at the impact of digital, the growing cult of the individual, and falling levels of religious conviction on charities. Go to www.heyheyjoe.info for more information.
Appendix: four good sources of data on wealth and poverty
You can download the report here:
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