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LONDON – Rising house prices and booming financial markets pushed Britain’s household wealth past £10 trillion last year, according to a new report.
Lloyds Private Banking said total household wealth reached an estimated £10.5 trillion in 2016, a 9% increase on 2015.
It said the value of assets rose far faster than prices or incomes in the last decade.
The value of residential properties and financial assets grew by £3.9 trillion – or 59% – in the period. Prices rose by 39% and gross household income rose by 37%.
So who’s benefiting?
At least half of UK household wealth is held by the richest 10% of the population, according to the Resolution Foundation, meaning a boost in asset values is disproportionately beneficial to the better-off.
The total value of financial assets – such as savings, shares, and pension funds – increased by £461 billion, or 8%, in 2016.
Lloyds said a 4.9% rise in house prices and 183,000 new homes in 2016 added an extra £431 billion to household wealth.
Sarah Deaves, private banking director at Lloyds Bank, said: “For many people, their overall wealth is locked up in assets that they hold for the longer term like their homes, their pensions, ISAs and investments. With rising house and equity prices, net worth has increased substantially in the past decade, growing by £143,000 per household on average.
“Increasing levels of wealth are clearly positive for households, but with recent changes, like pensions freedoms, it also highlights the increasing importance of proper financial planning.”