UK Economy

Figure 1: UK’s net worth increased to £10.7 trillion in 2020

UK net worth, current prices, 1995 to 2020

Total net worth

Produced non-financial assets

Non-produced non-financial assets

Financial net worth

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£ trillion

Source: Office for National Statistics – National balance sheet

Notes:

  1. The components of net worth may not always add to the total because of rounding.

UK’s net worth increased to £10.7 trillion in 2020

Growth in net worth was 5.0% in 2020, 0.7 percentage points above the post-downturn average growth of 4.3%. Both non-produced and financial assets made large contributions towards the UK’s growth in net worth during 2020 at 78.8% and 12.5%, respectively. This was also the first time that net financial assets made a positive contribution to the UK’s net worth since 2016. Produced assets grew by 0.9% in 2020, which was the weakest growth since 2010, and accounted for 8.7% of the growth in the UK’s net worth.

Figure 2: Non-produced assets drove the growth in net worth in 2020

Contributions to growth in UK net worth by asset, current prices, 1996 to 2020

Produced non-financial assets

Non-produced non-financial assets

Net financial assets

Average pre- and post-downturn

Total net worth

-15-10-505101520

Source: Office for National Statistics – National balance sheet

Notes:

  1. The components of net worth may not always add to the total because of rounding.

Download this chartFigure 2: Non-produced assets drove the growth in net worth in 2020

3.Household net worth

Household net worth grew to £11.2 trillion in 2020, an increase of 8.4%. This was the second highest growth since the 2008 global economic downturn and, notably, was marginally below the pre-downturn average growth rate of 8.5%.

Land contributed to 40.1% of growth in households’ net worth, which was driven by a 7.3% increase in average house prices. This rise was likely to have been affected by the reduction in stamp duty rates.

Similarly, “insurance, pension and standardised guarantee schemes” accounted for 39.7% of the growth in households’ net worth, and has been revised up since the preliminary estimate because of methodological changes included in Blue Book 2021. This growth was mainly driven by the increase in the value of defined benefit pension schemes, which resulted from historically low gilt yields. 

“Currency and deposits” contributed 21.5% of the growth in households’ net worth. Increases in bank deposits were consistent with a sharp increase in the household savings ratio, which reached its highest level on record in 2020.

Figure 3: Land and pension schemes were the largest contributors to growth in households’ net worth in 2020

Contributions to growth in UK households’ net worth, current prices, 1996 to 2020

Total household net worth

Currency and deposits

Loans

Equity and investment fund shares and units

Insurance, pension and standardised guarantee schemes

Land

Produced assets

Other financial assets

Pre and post downturn average

-15-10-505101520

%

Source: Office for National Statistics – National balance sheet

Notes:

  1. The components of household net worth may not always add to the total because of rounding.

Land and pension schemes were the largest contributors to growth in households’ net worth in 2020

4.General government net worth

General government net worth fell by £445 billion in 2020 to minus £1,494 billion, the largest annual fall recorded. Government financial liabilities increased significantly and were consistent with the increases in current government expenditure because of the coronavirus (COVID-19) pandemic.

Figure 4: Government net worth fell by £445 billion in 2020

UK general government total net worth, current prices, 1995 to 2020

Total government net worth

Produced non-financial assets

Non-produced non-financial assets

Financial net worth

-3,000-2,500-2,000-1,500-1,000-50005001,0001,500

£ billion

Source: Office for National Statistics – National balance sheet

Notes:

  1. The components of government net worth may not always add to the total because of rounding.

Government net worth fell by £445 billion in 2020

5.Financial net worth

The UK’s financial net worth increased by £63 billion. This remained negative at minus £0.5 trillion in 2020, meaning the value of the UK’s financial liabilities continued to exceed the value of financial assets. This was the first time UK financial assets increased more than financial liabilities since 2016 and have therefore made a positive contribution to growth in the UK’s net worth. This was mainly attributed to greater overseas bank deposits and loan contracts with UK banks. The factors that would have contributed to this include: the availability of financial support for businesses, cheaper forms of funding, changes in demand and reluctance to spend because of the uncertainty during the coronavirus (COVID-19) pandemic.

Figure 5: UK financial net worth remained negative but showed modest growth in 2020

UK financial net worth, current prices, 1995 to 2020

Monetary gold and special drawing rights

Currency and deposits

Debt securities

Loans

Equity and investment fund shares and units

Insurance, pension and standardised guarantee schemes

Financial derivatives and employee stock options

Other accounts receivable or payable

Financial net worth

-2,000-1,500-1,000-50005001,0001,5002,000

£ billion

Source: Office for National Statistics – National balance sheet

Notes:

  1. The components of financial net worth may not always add to the total because of rounding.

UK financial net worth remained negative but showed modest growth in 2020

Source: https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/bulletins/nationalbalancesheet/

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