The number of people in the UK with £25,000 or more in liquid assets has increased by a third over the last five years, as the two-year bear market was more than offset by the broad effects of the rise in property prices.
These figures are from Inscape, Abbey National's wealth management service, and the Future Foundation, a leading think tank. They update the findings of their extensive joint study The Emergence of the Mass Affluent, published two years ago.
According to the new analysis, there are now two million people in the UK who could be classified as 'mass affluent' those with liquid assets of £50,000 or more, an increase of 15% over the last five years. One in ten people now have liquid assets exceeding £25,000, an increase of nearly a million people, or 30%, over a five year period.
As forecast in the study conducted two years ago, the new figures show that mass affluence is growing significantly among the 25-44 year olds. This reflects the acceleration of higher-earning younger professionals and the growing trend of delaying having children until career and financial stability are achieved. Of those with £50,000 or more, one in five are in the 25-44 year old age bracket, compared with one in seven five years ago, as reported in the previous study.
Despite the effects of equity falls over the last two years, the average amount of liquid assets per household rose by a fifth to £800 over the last five years. In comparison the wealthiest 10% of the population saw their liquid assets grow by only 3% over the same period.
Inscape and the Future Foundation point to a number of reasons behind this trend:
John Kelly, head of client investments at Inscape, says: “While this broadly reflects the profile of Inscape's own 10,000-strong client base, the company is atypical in having attracted an equal proportion of male and female investors.
“The increase in wealth holdings among the mass affluent has clearly bucked the national trend, even though numbers have fallen short of the expectations of two to three years ago. The growth in wealth creation among the 25-44 year age group is significant. The trends underpinning this growth are likely to accelerate when the markets recover, positioning this younger age group as highly influential consumers.”