Regional wealth inequality

Wealth inequality in the North East

The latest data on wealth-based Inequality at the regional level covers April 2018 to March 2020. It shows that the overall GINI coefficient for the North East was 0.64 (where 1 is completely unequal distribution). This was the second highest coefficient of all the English regions behind only London. 

Of the different asset types, it is financial assets excluding pensions that is the most unequally distributed in the region. The GINI coefficient for this type of wealth in the North East was 0.95, the highest of any region and implying a very unequal distribution. Housing and pension wealth also had relatively high GINI coefficients, while physical assets were more evenly distributed. 

The single largest source of wealth in the region in pension wealth (as it is nationally). This has increased significantly since the implementation of automatic pension enrolments in 2012. Net property is the second most valuable asset type in the region, but in contrast the value of this asset type has fallen since the July 2006 to June 2008 period. Over the same time total property wealth in England excluding London increased by 47%.
 

Financial assets in the North East region 

The very high GINI in relation to financial assets in the North East is driven by the fact so many households possess no or only a small value of financial assets. The median value of financial assets in the region was £2,500 in the April 2018 to March 2020 period while the 25th percentile was £0. In some recent years the 25th percentile has even been below 0 indicating that over one quarter of households in the region were in debt. 

In contrast, regions with lower coefficients like the South East still have much larger absolute differences between the 75th and 25th percentiles than the North East, but because a higher proportion of household own at least some wealth the GINI coefficient gives a lower value overall.

In terms of change over time the position of the 25th percentile and median value of financial assets in the region has not changed much in nominal terms since 2006 to 2008. In contrast, there has been an increase of 31% in the 75th percentile over the same period. Regions in the South of England have generally seen much larger percentage increases across both the median and 75th percentile.

Property wealth in the North East 

Property wealth in the North East region is also unequally distributed. Around 38% of households are not occupied by home owners, and therefore do not possess any property wealth. This places a limit on how equitable the distribution of this wealth can be. Despite the region performing well on measures of affordability the proportion of homeowners in the region is lower than the national average. 

The value of total property wealth in the region is much lower than other regions, with the median value of household property wealth in the region being £45,000 if those who do not own a home are included in the calculations and £106,000 if they are excluded. 

The 25th percentile and median property wealth of home owners in the region has decreased since 2006 to 2008, while the 75th percentile has increased slightly. In contrast, England overall has seen increases in the property wealth of all three indicators.