The latest Wealth & Assets survey found that property wealth forms the largest part of household wealth in Great Britain, making up 40%.
Households that owned their property outright saw the biggest increase in median financial wealth, rising by £4,300 (8%) in real terms from £51,000 between April 2018 and March 2020 to £55,300 from April 2020 to March 2022.
In contrast, renters’ median financial wealth rose only from £500 to £900 in the same period.
Stephen Lowe, group communications director at Just Group, said: “Median household wealth continues to be driven primarily by property with homeowners seeing a significant boost in their wealth during the pandemic period, covered by this data, thanks to rising house prices.
“But within this general trend, the picture is still mixed.”
Lowe added: “There are clear divides between areas where property prices are higher and between demographic groups such as retirees where homeownership is higher.
“Perhaps most notable is the chasm in wealth between homeowners and renters, with those who own outright seeing their median financial wealth grow to £55,300 in 2020-2022 compared to just £900 among renters.”
Mike Ambery, retirement savings director of Standard Life, said: “The latest figures from the ONS report reveal that property and pension are the twin pillars of household wealth in the UK but also point to significant generational divides.
“The data shows that household wealth is heavily weighted towards the over 50s, with those with a household head between 65-75 years old seeing a 12% growth in their median household financial wealth, from April 2020 – March 2022.
Ambery added: “Older groups have benefited from property price growth and access to generous defined benefit pension schemes.
“As a result, many over-65s enjoy a stronger financial position, with greater security in their later years.
“Indeed, it was retired people rather than workers who saw the biggest increase in household wealth over the period.
“For those in their 40s and below the picture is markedly different, as DB pensions are increasingly rare, with more reliance on defined contribution pension pots where the onus is on the individual to make sufficient savings.”
He said: “With property prices rising steadily over the years and pensions continuing to provide significant long-term financial security, this data shows that these assets are critical to maintaining financial stability.
“Household wealth for those who owned their property outright was 15 times higher than among those who rented.
“The figures tally with our own analysis on the importance of home ownership to financial security and the particular challenge facing those who rent a property in retirement.”
