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
-2024681012
£ trillion
Source: Office for National Statistics – National balance sheet
Notes:
- 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:
- 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:
- 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:
- 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:
- 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/
