However you cut it, there are high levels of wealth and income inequality in the UK. 

If we compare ourselves to the G7 – countries that we usually consider to be our peers in terms of living standards and economic opportunity – we have the highest level of income inequality apart from the United States. At the same time, our absolute wealth gap – the gap in average wealth between our richest 10% and the poorest 40% – is the second widest in the OECD, with only the USA’s (again) being greater.

From this zoomed-out perspective, it doesn’t look good. And the picture doesn’t get any better when you zoom in. Income and wealth are distributed highly unevenly between both demographic groups and places within the UK. Median incomes – and especially household wealth – vary throughout the country, in ways that seem remarkably persistent over time. And, the richest are very rich: the top 1% of income earners take home nearly 13% of the UK’s total national income.

Added to which, households headed by a person from most minoritised ethnic groups (with some limited exceptions) have substantially less wealth on average than the white British majority.

These facts make for uncomfortable reading. We know that disparities in income and wealth have real and material impacts on people’s lives, affecting their ability to save, own a home or afford rent, access basic goods and services and pass on opportunities to their children.

All major parties heading into the UK general election have focused on economic growth. The challenge posed here is huge, as our analysis has found. But arguably as vital as whether that growth is achieved or not, is the question of who should gain from that growth. More broadly, we should also ask ourselves whether high levels of inequality are desirable or inevitable, and whether it's fair that people’s chances are determined by their parents’ circumstances. Addressing high levels of inequality isn’t easy but it will be necessary, becoming more urgent as we look to 2040.

To understand the choices that any future government will face, we, together with the Resolution Foundation, did three things. First, we took a hard look at the fundamentals of wealth and income inequality. Then we conducted a Delphi exercise (see Annex 2 for more detail), where we surveyed people deeply engaged in thinking about wealth and income inequality, as well as its impact on people’s lives. Finally, we convened a group of experts to talk through the big choices.

Inequality is, of course, much broader than the issues of income and wealth. Here we focus on income and wealth as core facets of economic inequalities, but inequalities are emerging as a key theme interwoven throughout all our UK 2040 Options workstreams, whether they’re in our healthcare system, our schools, or our transition to net zero. As we think about the changes that lie before us, a core question for our work is: what policies could help make the UK a fairer place to live in 2040?