Richest 1% have 23% of the country’s wealth

The economic elite control even more money than previously thought, new research shows.

The richest 1% of people in the UK have almost a quarter of the country’s wealth, higher than previously thought, research claims.

A report by think tank the Resolution Foundation, called The Missing Billions, has highlighted the wealth gap between the richest and poorest in the UK.

It analysed wealth data from the Office for National Statistics (ONS) and compared it with figures from the Sunday Times Rich List.

The research found that the ONS’ main data on wealth misses almost £800 billion of assets held by the wealthiest 1% of households.

This increases their share of total wealth from 18% to 23%.

Jack Leslie, economist at the Resolution Foundation, says: “The UK has undergone a wealth boom in recent decades, which has continued even while earnings and incomes have stagnated.

“But official data has struggled to capture these gains and misses £800 billion of assets held by the very wealthiest households in Britain.”

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Leslie says the government should tax this wealth through reforms to capital gains, inheritance and property levies.

The data will reignite wider calls for a wealth tax to boost the UK economy and help repay the Covid-19 state support to individuals and businesses.

The Foundation is also calling on chancellor Rishi Sunak to add a council tax supplement of 1% on properties worth more than £2 million.

Demands for greater taxation have also been made by many think tanks. The UK has already racked up a £394 billion borrowing bill to tackle the coronavirus outbreak.

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A group of tax experts and academics formed the Wealth Tax Commission last year and have said that rather than raising income tax, VAT or corporation tax, implementing a one-off charge on assets would be fairer and “economically efficient”.

The commission has proposed a wealth tax payable on all individual assets worth more than £500,000.

Finn Houlihan, managing director at consultancy ATC Tax, says tax rises are an inevitable part of the UK’s economic recovery from the pandemic and a one-off wealth tax would raise billions.

But he warns they will inevitably be opposed by many investors and high-net worth individuals.

Houlihan says: “Opponents of a wealth tax will point to the fact these investments help business production and growth.

“Taxing them could threaten the potential for these investments, stifling economic growth.”