Indian origin households are now the UK's wealthiest ethnic group, an LSE report finds. Their median wealth jumped to GBP 206,000 by 2021/23, outpacing others due to homeownership and strategic investments, widening the overall ethnic wealth gap.
Indian origin households now lead as the United Kingdom's wealthiest ethnic group, according to a report by the London School of Economics and Political Science (LSE). The study reveals that the median wealth for Indian households jumped from GBP 93,000 in the 2012/14 period to GBP 206,000 by 2021/23. This trajectory outpaces all other ethnic demographics in the country through a combination of homeownership and strategic investments.
Indian and Asian Groups Lead Wealth Growth
The report highlights that the largest gains in the UK are concentrated within the Indian and Asian Other groups. While the Indian group saw its median wealth rise by GBP 93,000 (from GBP 113,000 to GBP 206,000 for the Indian group), the Asian Other group experienced a surge from GBP 33,000 to GBP 125,000. In comparison, the White British group saw a more moderate rise of GBP 52,000, moving from GBP 125,000 to GBP 177,000.
Widening Ethnic Wealth Gap
Data shows that the majority of these increases occurred during the latter half of the decade, specifically between 2016/18 and 2021/23. Researchers note that median wealth gaps between ethnic groups have widened sharply since 2012/14. While gains are concentrated among adults from the White British and Indian ethnic groups, wealth remains close to zero for those in the Black African, Black Caribbean, and Bangladeshi groups. Conversely, adults in the Pakistani ethnic group experienced a marked decline in their median wealth during the same period.
Passive Gains Drive Disparity
The LSE findings indicate that disparities arise largely from passive gains rather than active income. "Wealth growth of the highest wealth growth group exceeds the lowest by a factor of five, while median accumulated active savings are less than double," the report states. This suggests that "wealth growth was driven largely by asset appreciation" rather than simple saving from income. Those who held assets at the start of the period benefited from price growth, while others were left behind.
Asset Ownership a Key Factor
Significant differences in asset ownership further explain the widening divide. In 2012/14, adults in the White British and Indian groups already maintained higher rates of home and investment ownership. By 2021/23, these gaps widened as these groups increased ownership while the Bangladeshi, Black Caribbean, and Pakistani groups saw "sharp declines--particularly in homeownership." The report mentions that "ethnic groups with stronger ownership positions at the start, and those able to expand ownership, were positioned to benefit disproportionately."
Stratified Wealth Mobility
Wealth mobility also remains stratified across the country. The report finds that "White British, White Other, and Indian individuals are more likely to move up from the bottom of the distribution." In contrast, Black Caribbean and Black African individuals face much lower upward mobility.
Inequalities Worsen Over Nine Years
The data shows that ethnic wealth inequalities in the UK have not only persisted but widened significantly over the last nine years. (ANI)
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