Scottish wealth breaks £1trn for first time but younger generations left to rely on inheritance

The average wealth per Scottish home to £259,000 for the UK as a whole, according to a report by the thinktank Resolution Foundation, whose report – The £1 trillion Pie: How Wealth Is Shared Across Scotland – says wealth is increasingly shaping Scottish society and led to calls for political debates to better reflect the shift.

The thinktank – founded in 2005 with the aim of improving the living standards of people on low to middle incomes – says pensions, rather than housing, play a bigger role north of the border, with more than half of household assets accounted for by pension savings, compared to 42 per cent across Britain.

Typical pension wealth in Scotland is just under £70,000 (compared to £58,000 in Britain), while typical property wealth in Scotland is £65,000 (compared to £95,000 in Britain).

Financial wealth, including investment products such as shares and bonds, comes to £100bn in total, and is very unevenly spread.

Physical wealth is thought to total £122bn, including other assets people own, from cars and yachts to furniture and artwork.

The foundation says Scottish household wealth is growing much faster than incomes, with the total having increased from five to more than seven times gross domestic product over the past decade.

This has made it harder to close wealth gaps by earning and saving, the report says, adding it would take a “very high income family” – those in the top 10 per cent, with a £58,000 income – 19 years of saving every penny they earn to become a “truly wealthy” family with assets worth more than £1 million.

The findings mean young people today have the lowest prospects of becoming “truly wealthy” than any other generation since the Second World War.

The report says big falls in home ownership rates are a key factor in the wealth gap for young adults. Home ownership rates fell from 48 per cent in 2003 to 32 per cent today.

Statics also show that a quarter of Scots have savings of less than £500, and 7 per cent have savings of zero, or have current accounts in the red.

The foundation is calling for politicians to take more account of wealth in policymaking and debates, and said that while reforms of council tax were welcome the Scottish Government could do more.

As one of the most significant wealth taxes, it is also devolved and Holyrood could do more to make it more accurately reflect property values, the report says.

Torsten Bell, director of the resolution foundation, said: “Wealth in Scotland has grown fast in recent years and will come to play a bigger role in determining life chances in the decades to come.

“This increase in wealth across Scotland has sat alongside falling home ownership rates, particularly for young families, who are struggling to accumulate wealth as preceding generations have been able to.”