Analysis shows highly concentrated nature of wealth in Ireland
A new TASC study shows that more than half of all wealth in Ireland is held by the top 10% of households, with the bottom 50% having only 5%. The study analyses data from the Central Statistic Office’s Household Finance and Consumption Survey.
The results show that wealth is highly concentrated, with 72.7% of net wealth held by the top 20% of households, which is higher than the Euro Area average of 67.6%. The bottom 50% of the distribution has around 5% of wealth. The net wealth of a household is calculated by adding up its assets, minus its debts.
Key findings of the study include:
• The top 10% of households have more than half of all the net wealth in Ireland (53.8%).
• The top 5% of households have 37.7%, while the top 1% has 14.8%.
• More than half of all financial assets (such as savings and investments) are held by the top 10% of households.
The report looks at wealth by different household types and finds that single parent households – the vast majority of which are headed by women – have by far the least wealth in Ireland.
The home ownership rate for single parents is 26.3%, which is less than half the rate for households made up of couples with children (68%), and even further below that of other household types (average 70%).
“This data shows how concentrated wealth is in Ireland. Given how far total wealth has rebounded since the crash, it is important that we understand who has benefited from this turnaround,” says Cormac Staunton, author of the TASC report.
“Our study shows that the average household has net wealth that is seven times greater than that of a single parent household. Single parents are less likely to own a home or a business, more likely to be credit constrained and they have much higher debt-to-asset ratios. Their average savings are ten times lower than the average household and more than half of all single parents have less than €300 in savings. Given that 85% of single parent households are women, there is a strong gender aspect to the distribution of wealth” Mr Staunton concluded.
Understanding the distribution of wealth is central to our understanding of economic inequality. Highly unequal societies are typified by high levels of wealth concentration, where wealth is held by very few people.
Wealth tends to be distributed more unequally than income and a highly unequal distribution of wealth causes problems for both the economy and society. TASC has previously outlined how wealth is one of seven key factors affecting economic inequality in our publication Cherishing All Equally – Economic inequality in Ireland published in February 2015.