British households suffer ‘biggest wealth slump on record’ | UK | News
British households have suffered the sharpest fall in wealth since records began, according to new research, as high living costs and global uncertainty continue to put pressure on family finances.
A survey of 6,000 people by wealth manager St James’s Place showed that respondents predicted the average household wealth would fall from £126,482 in 2025 to £104,329 this year, a drop of 17.5%.
The decline was recorded across every income group and represented the largest decline since the survey was launched four years ago, the company said.
Respondents pointed to rising food prices, lack of wage increases, high rents and rising tax bills as some of the biggest pressures on their finances.
Why did household wealth fall?
The findings come against a backdrop of increasing international uncertainty and continued pressure on the cost of living.
Households face growing concerns about rising daily expenses and the broader economy, leaving many feeling less financially secure than they did a year ago, according to the report.
The survey was conducted between March and April, before the latest political turmoil in Westminster that also shook financial markets.
What’s going on with inflation and interest rates?
The figures come as inflationary pressures are in focus and the Bank of England faces calls to raise interest rates in response to rising prices.
The Bank has warned that a prolonged conflict involving Iran could push inflation above six percent, potentially requiring interest rates to rise several times more, the Daily Mail report said.
Mortgage rates offered by lenders have already risen as financial markets anticipate a higher path in borrowing costs.
The report also notes that the conflict in the Middle East has increased existing economic pressures, inflation in the UK is already among the highest in the G7 and economic growth remained weak before the latest rise.
What did St James’s Place say?
Alexandra Loydon, Group Advisory Director at St James’s Place, said: “Many households are feeling worse off as living costs and increasing global uncertainty put pressure on confidence and understandably affect how people feel about their finances and their future.
“People are naturally feeling a little more cautious, uneasy and insecure. There are long-standing financial pressures on people.
“There is a decline at every income level, indicating that people are feeling less resilient.”
He added that research suggests that people who follow a clear financial plan are generally better positioned to maintain or grow their wealth, regardless of their earnings or personal circumstances.
How was wealth measured?
The survey measured people’s perception of wealth by looking at savings, investments and physical goods, excluding property and retirement assets.
According to the findings, average perceived household wealth is now below the £111,797 level recorded in 2022 when the research first began.
The research also found that twice as many people said their financial situation had worsened in the past year compared to those who thought it had improved.
