Wealth and Assets in Scotland, 2006–2014

1. Introduction

This report provides a detailed analysis of the wealth of private households in Scotland. The analysis is based on new data from 2012/14 - the fourth wave of the Wealth and Assets Survey ( WAS), which is the main source of information on the economic well-being of households in Great Britain (England, Wales and Scotland). Our findings provide an update to " Wealth and Assets in Scotland 2006 to 2012" published in March 2015, which was based on the previous survey periods.

Wealth is one of the key components of the economic system. For individual households, it can be used as a source of finance to improve current or future living standards, to invest in opportunities such as education or entrepreneurial activities, and to provide financial resilience, reducing vulnerability to shocks such as unemployment or illness. Many people will try to grow their wealth throughout their working lives, in preparation for retirement, but households with low income and low starting wealth will find this more difficult. Such inequality in wealth ownership raises fundamental questions of fairness and social justice for Scottish society.

In this report, the measurement and analysis of household wealth is split into four main components: property, financial, physical, and private pension wealth. These are defined on the following basis:

Property wealth (net property wealth) is the value of all property owned (the main residence and any other property owned) less any debt on the property ( e.g. mortgage) and equity release. It is derived from respondents' own valuations of their properties, rather than any survey valuation.

Financial wealth (net financial wealth) is calculated as the sum of all financial assets (such as bank accounts, savings accounts, stocks and shares) minus all liabilities (such as overdrafts, loans, credit card debt, and arrears on household bills). These can be formal assets, such as savings accounts or loans from banks, or informal assets, such as money held at home, or borrowing from friends and family.

Physical wealth (gross physical wealth) is the value of household goods such as appliances, computers, televisions, jewellery, collectables, vehicles, personal number plates, and other valuables. The valuations are derived from respondents' own estimates of the value of items. Any borrowing to finance such purchases is not included in this estimate (borrowing is included in net financial wealth).

Private pension wealth is an estimate of the value of wealth held in private (non-state) pension schemes, expressed as an equivalent 'pot of money'. It comprises occupational and personal pensions and includes pensions of public sector workers. The estimate is based only on the pension rights accumulated to date and does not include rights which may be built up in future.