A report commissioned by wealth manager Kleinwort Hambros reveals that Yorkshire is witnessing a rise in entrepreneurial wealth which could help to bring jobs and investment to the region.
Based on data from the Wealth and Asset Survey, and research from the Centre of Economics and Business Research, the report reveals that the wealthiest 10 per cent of households in Yorkshire and the Humber had on, average, a total household wealth of £907,000 in 2016, up from £640,000 in 2008 – an increase of 41.5 per cent.
A spokesman said: “The survey reveals that in this region, total household wealth consists of £102.0bn in financial wealth, £102.4bn in physical wealth, with property wealth of £238.3bn and pension wealth of £339.1bn.”
Chris Perkins, who leads the team of private bankers in Kleinwort Hambros’ Leeds office, said: “It is important not to underestimate the power of the financial markets and our findings reveal how strongly the financial markets have performed since the financial crisis, in particular.”
He said it was important to invest in a pension from an early age.
He added: “Starting 10 years’ earlier can make the difference of up to £571,000 in a pension pot by the age of 65.”
The report reveals that overall wealth in the UK has grown by 4.5 per cent a year since the financial crisis of 2008, from £8.5 trillion to £11.5 trillion.
In total, eight of the wealthiest 10 districts and counties in the UK are in the South East and London, underlying the regional concentration of wealth.
Mr Perkins added: “While it comes as no great surprise that the highest household wealth is concentrated in districts which are predominantly in the South East, we are seeing significant wealth being generated outside of London.
“Yorkshire joins Berkshire, Edinburgh and Midlothian as an area where households in the top decile hold around £1m in aggregate wealth. In Yorkshire, we are seeing a rise in entrepreneurial wealth, as well as a greater concentration of professionals and executives, which is driving asset creation.”
Although the British love of property is well-documented, Mr Perkins said the survey’s findings also underlined the importance of pensions.
He added: “The UK’s traditional obsession with property ownership may already be coming into question, as the current election campaign has introduced the possibility of the elderly having to use the value of their home to fund the cost of care. Beyond any ideological issues, the survey shows that over the nine years since the financial crisis, pensions represented a better investment in pure performance terms.
“These findings should serve as a timely reminder that putting some money aside each month ought to be a priority for everyone, even ahead of hurrying to get a foot on the property ladder. This applies especially to the young. The compounding of growth has always meant that the earlier you start saving, the better.”
Above all, a pension needs to be a manageable commitment, Mr Perkins said.
He added: “The survey predictably shows that property is responsible for a larger chunk of household wealth in London and the South East, where house prices are also highest.
“But entrepreneurial spirit is driving increased wealth in new areas of the country, notably in Cambridgeshire, Berkshire, Yorkshire and Midlothian.”