Over the last few decades, the UK’s inequality has increased rapidly.
We’re all familiar with the headlines – record profits and CEO pay, billionaire wealth spiralling out of control, luxury developments in our cities. In 2023, the UK’s 171 billionaires now hold as much wealth as over 40 million of the rest of us.
The Equality Trust was created after the book The Spirit Level documented the ways in which more equal societies worked better. We’ve found that the benefits of becoming a more equal society would be enormous: longer healthy lives, better education systems, less crime, and happier communities. The UK’s inequality has left us more unhealthy, unhappy, and unsafe than our more equal peers.
It’s also causing huge damage to our economy. Over-reliance on the financial systems that allow for massive profits and wealth hoarding has hollowed out our infrastructure, encouraged massive regional disparities, and left us vulnerable to shocks and recessions.
Now we’ve found that there’s also a direct financial cost to inequality. As well as hurting our economy and communities, the UK is effectively spending huge amounts every year to subsidise the costs of inequality.
The Cost of Inequality
Previous research in The Spirit Level indicated a correlation between equality and quality of life in several areas. In this report, we analysed 23 comparable OECD countries’ inequality levels and their performance in key metrics to calculate what UK’s inequality is costing us. We found that compared to the average for developed OECD countries, the consequences of the UK’s greater inequality cost us £106.2 billion yearly. Compared to the top five most equal countries, the UK’s inequality cost us £128.4 billion yearly.
This is across just four outcomes. The true cost of our inequality will be much higher. This is an enormous sum of money spent each year; larger than the annual budget for the Department of Education or Universal Credit and dwarfing the cost required to fix the NHS crisis.