Friday 27 November 2020 5:12 pm

UK has ‘significant’ ethnic wealth gaps, latest data suggest

Wealth in the UK is divided along ethnic lines, the latest data from the Office for National Statistics suggest.

White British headed households were the wealthiest ethnic group, according to data collected between 2016 and 2018.

White households had a median net worth of nine times that of Black African households, the least wealthy ethnic group.

Ethnic minority households are more likely to be younger, non-homeowning, and in lower-earning professions, all of which are associated with lower wealth.

However, once these characteristics were controlled for, many ethnic wealth gaps remained significant, according to the Office for National Statistics.

A murky picture

Though household characteristics, such as age and socioeconomic status, explain most of the wealth gap between Black African and White households, this is not the case for all ethnic groups.

Indian households, for example, have an average of £270,000 less in wealth than their household characteristics would predict.

Other factors, such as discriminatory lending policies, and differing migration histories, may better explain the ethnic wealth gap.

Is the term “BAME” useful?

These data suggest that wealth in the UK is not neatly divided across Black and Minority Ethnic (BAME) and non-BAME lines.

There were vast differences within the BAME groups.

Bangladeshi households, for example, had a third the median wealth of Pakistani households.

Some researchers have called for the term BAME to be scrapped because of its imprecision, with the British Medical Journal officially abandoning the term on Monday.

Where did wealth gaps occur?

The starkest ethnic wealth gaps were in property and pensions.

Indian households had the highest net property wealth, at £150,000, followed by Pakistani and White British households, with just over £100,000.

For all other ethnic groups, however, average property wealth was half this amount, at £50,000.

In pensions, White British households had an average of £80,000.

No other ethnic group had pensions even approaching that amount, with Black African households holding an average of just £2,000 in pensions.