FAI: 45% of Scotland’s wealth held by 10% of households

FAI: 45% of Scotland's wealth held by 10% of households

Income inequality in Scotland, while lower than in the UK as a whole, is above the average of European countries.

A total of 45% of Scotland’s wealth is held by 10% of households, whilst a tenth of households have no, or negative wealth, according to a new report from the Fraser of Allander Institute (FAI).

The report, carried out by the institute, which is part of the University of Strathclyde, explores trends since 1999 in the key factors that influence health.

The report argues that factors including financial security, the quality of housing and the local environment, education, and employment, can affect health in a wide variety of ways. Living in damp or overcrowded accommodation can affect health directly, whilst financial security can affect mental wellbeing, and influence people’s ability to engage in healthy behaviours.

‘Health Inequalities in Scotland: Trends in the socio-economic determinants of health in Scotland’ sets out that there has been an unprecedented stagnation of earnings and household incomes in Scotland (as in the UK) in the decade following 2009/10.

Between 2009/10 and 2019/20, household disposable income grew at less than half the rate it had in the previous three decades. By 2021, typical weekly earnings were around £80 per week below what they would have been had long-run trends before 2010 continued.

Income inequality in Scotland, while lower than in the UK as a whole, is above the average of European countries. Inequalities of earnings, wealth and educational attainment are also relatively high in Scotland, and have remained persistently so for many years.

The report revealed that the proportion of people in Scotland living in poverty did fall throughout the first decade of the 2000s, but has begun to increase again since the mid-2010s. Some groups are consistently more likely to be in poverty than others. Rates of food insecurity for example are particularly high amongst single parents. Living in poverty is associated with lower life expectancy, and greater risk of diet-related problems, chronic illness and mental health problems.

At the same time, earnings inequality has fallen slightly in Scotland during the past decade. But earnings inequality remains at least on a par with equivalent measures for European countries, and there has been some rise in insecure forms of work. The characteristics of a job – its pay, security, and autonomy – can influence on health and wellbeing.

Socioeconomic background continues to play a strong role in influencing educational attainment and participation in Scotland, with mixed evidence of improvement.

The report also revealed that over the past 20 years, housing costs have tended to increase relatively more for those in the private rented and social rented sectors, relative to those in owner occupation. Living in a damp or cold home can affect health directly, whilst housing costs and security can influence anxiety and mental wellbeing.

A slowdown in spending on public services – including health and social care – since 2010 seems likely to have contributed to a contemporaneous slowdown in improvement in public health. Cuts in social security spending since 2010 may have contributed to a rise in the proportion of people suffering from mental health problems.

David Finch, assistant director at the Health Foundation, said: “Today’s report represents a comprehensive attempt to map and assess trends in a wide range of the socioeconomic determinants of health in Scotland including incomes and poverty, wealth and debt, employment and education, housing and more.

“Across these areas the message is clear. Inequalities are high, and progress has slowed. Addressing socioeconomic inequalities and improving living standards will be key to making meaningful progress in towards improving the health of Scotland.”

Chris Creegan, chair of the expert advisory group, added: “Today’s report reiterates the critical importance of wider socioeconomic factors in influencing health and stubbornly high health inequalities.

“Today’s report sets out a strong evidence base. The Health Foundation’s report, to be published in January, will consider evidence from the review and focus on how Scotland can build on strong policy intent to create a sustainable approach to closing the gap in health outcomes.”

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