Between the outbreak of the coronavirus pandemic in the UK in March 2020 and the end of the year, two of the richest people in the world both saw their net worth skyrocket. Jeff Bezos, founder of Amazon, became $72 billion richer between 18 March and 31 December 2020. The wealth of Elon Musk, who founded the electric car company Tesla, grew by $129 billion over the same period.<\/p>\n\n\n\n
At a time when those already vulnerable and in poverty<\/a> have suffered disproportionately, such reports<\/a> have fed the public perception that wealth inequality has grown during the pandemic. But what do we know about the wider story of wealth inequality beyond the \u2018\u00fcber-rich\u2019?<\/p>\n\n\n\n It\u2019s difficult to know what\u2019s happening right now, because any data that allow us to calculate standard inequality measures are produced at a significant lag. But we can make some educated guesses based on how changes in asset prices, expenditure patterns and debt levels will affect different households. Taken together, these suggest that after an initial decrease in the early months of the pandemic, it is most likely that wealth inequality has continued to grow.<\/p>\n\n\n\n Before the pandemic, the richest 1% of people in the UK held around 17% of total wealth (Advani et al<\/a>, 2020). In the early days of the crisis, inequality may have actually diminished, with stock market losses predominantly affecting the rich. To see this, it\u2019s helpful to understand what types of assets comprise wealth, and how the value of those assets has changed.<\/p>\n\n\n\n Broadly, household wealth is made up of five asset classes: housing; pension; financial; business; and physical (items such as household contents, cars and collectables).<\/p>\n\n\n\n For the majority of the population, if they have any substantial wealth, it is usually held in the form of housing and pensions (Advani et al<\/a>, 2020). Among the very richest households, financial wealth and business wealth make up a much larger share of the total (see Figure 1).<\/p>\n\n\n\nWhat happened early in the pandemic?<\/h3>\n\n\n\n
Figure 1: Composition of wealth, by total wealth<\/h4>\n\n\n