The rich got richer during the pandemic, but the poorest got poorer, with no sign the trend will end soon
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More than five million people became millionaires during the global pandemic, research shows, as the gap between the rich and poor widens.
There are now around 56 million millionaires in the world.
Analysis by bank Credit Suisse shows that the UK now has the fifth-highest proportion of high net worth individuals in the world, with 4% of the total.
The number of UK millionaires rose from 2,233 in 2019 to 2,491 in 2020, a rise of 258.
The percentage of the UK population worth more than £1million has risen steadily.
Back in 2000 just 1.7% of Brits qualified. That rose to 3% in 2010 and 4.7% in 2020.
The United States has the most millionaires – 39% of the total.
Behind that is China, with 9%, Japan, with 7%, Germany (5%) and the UK (4%).
How are people getting rich?
The number of millionaires is rising for several reasons, Credit Suisse said.
Firstly, rising house prices have helped many build large amounts of wealth.
Secondly, the recovery of stock markets around the world after the pandemic has meant investments rising in value.
Finally, many of the new millionaires have benefitted from currencies in their own countries performing very well against the US dollar.
Total global wealth grew by 7.4%. But the rising number of mega-rich does not mean we are all getting richer.
In fact the opposite is true. The wealth gap between the poorest and richest grew in 2020, the report found.
Anthony Shorrocks, economist at Credit Suisse, said: “In the lower wealth bands where financial assets are less prevalent, wealth has tended to stand still, or, in many cases, regressed.”
For example, in the UK alone Covid more than doubled the number of families having welfare payments restricted as millions surged onto Universal Credit.
During the height of the pandemic richer households built up savings faster than normal, while poorer families ran them down or accumulated debts, according to the Institute for Fiscal Studies (IFS).
The IFS said that, for richer households, falls in income have generally been outweighed by declines in spending, meaning they have been able to shore up surplus cash into savings more quickly than usual.
The poorest households tend to spend bigger percentages of their income on essentials and so often have less room to cut back.
There are also growing numbers of children living in poverty, according to the government’s own figures.
There were just under three million children living below the breadline in March 2020, up from 2.4million kids in March 2015. This means that, even before coronavirus hit, one in every five children in Britain was living in poverty.
The future is likely to see the number of millionaires grow massively.
The UK could get up to 93% more millionaires, Credit Suisse said.