UK, COVID-19 Deepens Polarization... Commoners' Assets Increase by 130,000 KRW While Wealthy See 70 Million KRW Rise

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Jaehee] A survey in the UK revealed that asset polarization between classes has deepened due to increased household savings and rising housing prices following the COVID-19 pandemic.

On the 12th (local time), major foreign media outlets reported citing a report released by the London-based think tank Resolution Foundation, which showed that households in the bottom 30% of asset distribution saw their asset prices increase by only ?86 (about 130,000 KRW) per person, while median households increased by ?7,800 (about 12.4 million KRW), and the top 10% wealthy households increased by ?44,000 (about 70 million KRW).

During the pandemic, the total assets of UK households increased by approximately ?90 billion (about 143 trillion KRW), but the distribution was unequal.

The middle and upper classes owning real estate and stocks enjoyed a "pandemic special" due to rising asset prices.

With reductions in property acquisition taxes and increased demand for "larger homes" suitable for remote work, UK housing prices rose by 9.9% over one year until last March. This is the largest increase since 2007.

Additionally, the general reduction in household consumption and increase in savings during the pandemic also contributed to asset polarization.

On the other hand, researchers pointed out that households with lower income and asset brackets had to reduce savings and increase debt.

Jack Leslie, senior economist at the Resolution Foundation who conducted the study, said, "During lockdowns, households had to reduce consumption," adding, "Meanwhile, housing prices continued to rise even as working hours decreased."

Accordingly, the researchers concluded, "While the total amount of assets increased, household inequality worsened during the pandemic."

Such household polarization in the UK is expected to continue.

In a public opinion survey included in the study, 35% of respondents said they have become accustomed to saving and will continue to save rather than consume after the pandemic. Only 14% responded that they would actively consume post-pandemic.

Major foreign media evaluated these results by stating, "This will attract the attention of the Bank of England (BOE), which expects that increased household assets will lead to consumption and gradually stimulate the economy."

The researchers suggested, "The UK government should not only focus on taxes on income or expenditure but also carefully consider ways to tax assets."

This content was produced with the assistance of AI translation services.