The last decade has seen household wealth soar by more than £86,000; proving that consumers in the UK have weathered the effects of the ongoing financial crisis.
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According to research by Lloyds TSB, the 55% growth in household wealth has surpassed the growth rate of 44% for household income, and 38% for retail price index inflation over the last ten years.
Property now makes up a greater share of household wealth than it did a decade ago, rising from 36% in 2001 to 40% in 2011. ëBricks and mortarí wealth also increased at a faster pace than financial wealth; 73% against 45%.
Homes have been a key driver for household wealth over the last ten years, as the value of housing stock has increased by a staggering £1.8 trillion. This increase has also overtaken the rise in mortgage debt, which has gone up by 111% since 2001, to £1.25 trillion in 2011.
However, since start of the economic downturn in 2007, household wealth has declined by £6 billion ñincluding a 4% decrease in property wealth.
Household wealth was also boosted by a £718 billion rise in the equity held by households in life assurance and pension fund reserves. This was alongside a £549 billion increase in deposits held in financial institutions and National Savings.
ìWhilst the financial position of UK households has weakened a little since 2007 as a result of deteriorating economic activity and lower house prices, overall their financial position is a lot stronger than a decade ago,î said Suren Thiru, economist at Lloyds TSB Private Banking.
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