Millionaire married couples double in 10 years

12 February 2022

More than a quarter of married British couples have wealth of over £1 million, more than double that of 10 years ago, the latest data from the Office for National Statistics has shown.

According to the figures, 27% of men and 26% of women either married or in a civil partnership lived in a household with more than £1 million of wealth between 2018-20, up from 12% a decade ago.

There were 4.58 million households with wealth of over £1 million between 2018-20, rising rapidly from 1.75 million in ten years. The figures include net property worth, minus any mortgage, as well as the value of occupational and private pensions.

However, advisers at NFU Mutual warned that rising wealth will lead to more people being caught in “tax traps.”

Sean McCann, chartered financial planner at NFU Mutual, said: “Higher house prices and an increase in pension wealth has created more millionaire couples in Britain than ever before.

“However, rising wealth in property and pensions will lead to more people being caught in tax traps as a number of important thresholds have been frozen until 2026. The main £325,000 allowance each person can pass on free from inheritance tax has been frozen since 2009.

“Although we’ve seen the introduction of the ‘Residence nil rate band’ that allows individuals to pass on an additional £175,000 of the value of their home to ‘direct descendants’ – both these thresholds have been frozen until 2026 – a decision expected to collect £985m more in inheritance tax through fiscal drag. Crucially, inheritance tax isn’t normally charged on pensions and so more and more families are using pensions as ways to transfer wealth between generations.”

McCann also warned that individuals were likely to be hit by the frozen pension lifetime tax, with Britons holding £6.45 trillion in pension wealth – £1 trillion more than they hold in property wealth. The additional freeze on income tax thresholds, a move which is expected to raise a further £19.2 billion for the government, is also likely to see more people caught in the 40% tax band and lose some or all of their child benefit.

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