Wealth

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    Wealth

    • Wealth is a stock of assets that have a financial value
    • There is marketable wealth and non-marketable wealth
      • The former is wealth that can be transferred to another person, e.g. a house or shares
      • The latter is specific to a person and cannot be transferred, e.g. pension rights.
    • The distribution of wealth can be considered in terms of:
      • How it’s distributed amongst the population (size distribution)
      • The forms in which it is held
      • The characteristics of those holding wealth

    The Size Distribution of Wealth

    • Wealth is very unevenly distributed amongst the UK’s population

    Wealth Distribution Between Assets

    • Wealth can be held in forms such as life insurance, pension funds, shares, etc.
    • Some forms of wealth, such as life insurance and pension funds are more evenly distributed than things like shares and land

    Wealth Distribution Between Different Groups

    • People can become wealthy through inheritance, saving, and using their entrepreneurial skills
    • Wealth is unevenly distributed between age categories, but it is to be expected; people in their 40s and 50s have had more time to accumulate savings than younger people, and so have greater wealth
    • Wealth also varies between ethnic groups; men have more wealth than women, etc.

    Causes of Wealth Inequality

    • Inequality of income
      • Work overtook inheritance as a source of wealth in the UK
      • Having a high income makes it easier for people to save, and so gain higher interest rates on their savings.
    • Differences in entrepreneurial skills
      • Some people are self-made millionaires as a result of building up a business
    • The pattern of inheritance
      • In the UK, wealth has traditionally passed down to the eldest son, and hence kept wealth in the hands of the few
      • In other countries where the property and other assets are distributed amongst the children, wealth is more evenly distributed over time.
    • Marriage patterns of the wealthy
      • The wealthy tend to marry other wealthy people, and this further concentrates wealth in the hands of the few.

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