Have economic inequalities in the UK narrowed over the past 100 years?

Both income and wealth inequality, as measured by the shares held by the top 1%, declined consistently in the UK from 1914. But there was an abrupt halt in both declines in the early 1980s. Since then, income inequality has risen while wealth inequality has appeared steady for over four decades.

Globally, there were dramatic and apparently permanent declines in almost all measures of economic inequality within countries across the 20^th century. The UK too experienced these global trends, as discussed here as part of a series to mark the centenary of the Economic History Society. It appears we live now in a new equilibrium.

Before 1926, and before the First World War, the UK was uniquely unequal. Perhaps due to the historical concentration of land ownership within a small aristocracy, combined with the effects of the Industrial Revolution, the Gini coefficient of wealth (a measure of the distribution of wealth across a country) at death in England in 1900 was around 0.98 – where one represents total inequality, that is, one person holding all the wealth (Cummins, 2021).

This degree of inequality was comparatively unusual, both historically and across countries (see Milanovic et al, 2011 for a diverse, long-run comparison of income inequality across societies). While the Industrial Revolution resulted in higher incomes and an escape from pre-industrial poverty, wealth remained spectacularly unequal in a relative sense.

Wealth inequality is always greater than income inequality, and this trend applies everywhere. Indeed, the focus of critics of capitalism has been on the accumulation of capital in great fortunes, as we see today among the new titans of technology. Their notoriety and the hatred that they inspire among many are justified by the apparent historical trajectory of inequality – or some nostalgic sense that we have fallen from a lost golden age of equity.

What happened to inequality in the UK after 1926?

Both income and wealth inequality, as measured by the shares held by the top 1%, have declined consistently in the UK, beginning at the onset of the First World War. (Note when comparing inequality over time, it is crucial to take care about the different methods that different scholars employ to generate their estimates. For example, a researcher’s choice on how much wealth to infer for those that die with no taxable wealth, the majority.)

Wealth fell from a top 1% share of 70% to a low of 20% between 1900 and 1980, according to the World Inequality Database. The wealth Gini coefficient of 0.98 in 1900 (referred to above) fell to 0.80 by 1992. Income inequality declines were less dramatic, but still substantial: from 27% to 7%.

Figure 1: The wealth share of the top 1% in the UK, 1900 to 2024

Source: World Inequality Database.

There was a striking and abrupt halt in the declines in both wealth and income inequality sometime in the early to mid-1980s. And thereafter, income inequality has risen to a top 1% share of 13% in 2024; and wealth inequality has been surprisingly steady for over four decades at a top 1% share of 20% between 1980 and 2024.

These top share estimates are the primary measure used to analyse inequality as they are relatively easy to calculate with statistical data from the Inland Revenue, now known as HM Revenue and Customs (see Alvaredo et al, 2018). Data on the full distribution are rarer and add valuable information to the empirical sketch above. For example, the decline of the top 1% wealth share was almost entirely absorbed by the rest of the top 20-30%, and did not trickle down to average wealth (see Cummins, 2021).

What drove the declines in inequality?

There are a few candidates for what led to the fall in inequality.

First, the r-g model of capitalism, famously proposed by economist Thomas Piketty in 2014. This states that where r, the rate of return on capital, is greater than g, the growth rate of the economy, society tends towards inequality. Where ris lower than g, society tends towards equality.

We can measure both of these numbers accurately for the 20^th century. Outside the war years, there was no point at which r was lower than g in the UK. We can also directly estimate dynastic wealth destruction, and here too, we find that economic growth following both the First and Second World Wars was sufficient to recover pre-war wealth fast.

But tax was an equalising force. Both income and wealth taxes, particularly on inheritance at death, were historically high in the UK for most of the 20^th century.

These high taxes overlap with the inequality trends described above almost perfectly. For example, Figure 2 shows the harmonisation of death duties, from an escalating range of rates, peaking at 75% for the most valuable estates, to a flat 40%, above a minimum estate value threshold, by the early 1980s (see Cummins, 2021).

Figure 2: Death duties, 1892 to 2015

Source: Cummins, 2021.

Note: 2015 prices; inspired by similar figure in Nicholas, 1999.

The coincidence of trends in taxes and top wealth shares is intriguing and perhaps connected. But wealth is measured very imperfectly (through probated estate at death) and there could therefore be other factors at play.

Indeed, in the 20^th century, there was an explosion of financial innovation and deregulation, coupled with internationalisation. This included the employment of trusts and offshore companies to handle family fortunes in tax-efficient ways – avenues increasingly pursued by the very richest.

Could the decline of the top 1% wealth share in the UK be illusory?

These new financial opportunities raise the question of whether the decline in wealth inequality is rather an artefact of more efficient estate organisation.

Using individual level records of all wealth-at-death in England over the 20^th century, hidden wealth can be estimated by tracking rare surname dynasties over time (Cummins, 2021). This shows that English elites conceal around 30% of their total wealth from probate, and the richer the dynasty, the greater the concealment.

This hidden wealth statistically predicts whether an individual appears in the Offshore Leaks Database of 2013-16, house values in 1999 and Oxbridge attendance, 1990-2016. This means that wealth, hidden from inheritance tax, is being used for status investment and consumption.

Crucially, this wealth is not in our wealth share estimates. Accounting for this hidden wealth, which is an estimated minimum, eliminates about 30% of the observed decline of the top 10% wealth share, at the dynastic level, over the past century (see Figure 3).

Figure 3: Wealth shares accounting for hidden wealth

Source: Cummins, 2022.

As a result, it is conceivable that a large share, if not all, of the decline of the wealth share of the top percentiles of the wealth distribution is a mirage (see also Zucman et al, 2019 for these dynamics in Norway). Another fragment of evidence supporting this is the flat trajectory of average surname wealth, 1950-80, for all rare surnames, rich and poor (a point neglected in Cummins, 2021, but suggestive of widespread estate rearrangement to avoid inheritance taxes).

What does inequality look like today?

Since 1926, the ethnic composition of the UK population has been transformed, with significant inflows of Europeans, Indians, Pakistanis, Bangladeshis and black Caribbeans, among many others.

Historically, and excluding the Irish, migrants to the UK were always richer than the native Britons. But this has changed over the past 50 years, with the sizeable Bangladeshi and Pakistani communities now being significantly poorer. This modern pattern, an ethnicity wealth gradient, can be expected to play a greater role in politics – as it has in the United States – over the coming decades.

One historical example is the Irish diaspora in England, people who, as mentioned, were always poorer and experienced a higher rate of infant deaths than the English. These inequalities, at the end and start of life, persisted from the exodus induced by the Great Famine of 1845, until very recently. This suggests that ethnic inequalities take a long time to dissipate (see Cummins and Ó Gráda, 2025 and Cummins, 2024).

Regionally, London and the South East have outperformed the rest of the UK, in terms of productivity, education and wealth. For example, median household wealth was £500,000 in the South East in 2022, and £180,000 in the North East, according to wealth data from the Office for National Statistics (ONS). This geographical concentration of economic dynamism is a key characteristic of the contemporary UK economy.

Figure 4: Median total household wealth by region, 2020 to 2022

Source: Office for National Statistics (2025)

Encapsulating the trajectory of inequality is difficult. One positive is that across the 20^th century, there was a secular trend towards equality of income. But we cannot be as sure when it comes to wealth.

Ethnic-based inequalities have emerged as substantial, and the evidence suggests that they do not fade away fast.

The overall trends since the 1980s, in particular for wealth, are hard to pin down.

Does inequality matter?

Inequality is, by definition, a relative term. Perhaps a rising tide lifts all boats, and we should care less about the greater uplift of those higher up. It may even be intrinsic to capitalism that wealth elites have incentives to grow their wealth by allocating it where it can get a greater return, and this can only happen where they get to keep the fruits of their risk.

In the past few years, a popular ‘degrowth’ movement has emerged, and its ideas have recently been codified by some eminent economists (see this 2026 editorial in The Guardian). One of its defining diagnoses is billionaire wealth. Some view such fortunes as a sickness of capitalism and propose confiscatory wealth taxation, such as that designed for California.

These ideas, which are also part of the zeitgeist fuelling the rise of democratic socialists such as New York mayor Zohran Mamdani, have proved to be seductive to many. The narrative is clear: economic growth and billionaire wealth are fundamentally unfair and immoral.

The counter to this narrative is the reduction of poverty that has taken place over the past 150 years, which is largely attributable to economic growth (Clark, 2007). If taxation of billionaires impedes growth, we lose the real gains of raising population living standards, including those of the very poorest. In this telling, you cannot have poverty reduction without economic growth, and increasing, or stagnant, inequality.

What can we learn from history?

The truth is that we are now in a battle of narratives – and economic history is central to this. Alas, we cannot say for certain what the effect of growth has been on inequality. The famous conjectures of economics Nobel laureate Simon Kuznets – that growth would first raise inequality and then reduce it – are stylistically correct (Kuznets, 1955). But we cannot identify what the causal relationship is.

On a deeper level, our data quality does not even allow us to generalise about what happened to the top 1% wealth share over the 20^th century. We can cherry-pick; across countries, the great equalisations of income and wealth were accompanied by striking rates of economic growth. Think of Europe’s ‘golden age’, 1950-73, where economies boomed and top percentile shares declined massively. But this has stopped since 1980.

So, has inequality in the UK narrowed since 1926? At first glance, yes, and probably by a lot for both income and for wealth. But for the latter, as explained above, the decline may be a mirage, and we have little power to pin down the trends since the plateaux of the 1980s.

Regions are diverging, with selective migration reinforcing these trajectories. Ethnic inequalities are emerging too, and they are likely to be a greater focus of politics and research in the coming decades.

Ultimately though, it has been the past couple of decades of anaemic economic growth in the UK, with the resulting stagnation of wages and middle-class wealth, that are likely to be responsible for the rise of zero-sum thinking in economics and politics of late.