Taxing wealth or income – who saves and how much?

The ability to save money and invest it whether in shares, bank accounts or property is linked to earnings levels. Those on higher incomes have more disposable income and after spending money on everyday expenditure they have funds, which can be used to increase asset levels.

 

One example of how those on higher earnings are able to increase their assets is the data on Individual Savings Accounts (ISAs).  Data clearly shows that the average market value of ISAs held by holders according to income increases with the level of income.  This is hardly surprising.

 

Those in the lowest income group hold ISAs with a market value of £18,059 whereas those in the highest income group (£150,000 or more) hold ISAs worth £94,894.

 

Income levels are also and important factor in the ownership of dwellings used as second homes, holiday lets and private rented properties.

Looking at second homes we find - “Most people with a second home were in the highest income quintile (46%). This was similar to 2010-11 when the majority of people were second homes were also in the highest income quintile (52%)…”  [Department for Levelling Up, Housing and Communities].

 

Again those with rental income from property are in the higher income categories.  “… 79 per cent of adults with rental income from other property are in the top half of the income distribution. Around one third of each are in the top decile…” [Gardiner, L.]

 

Conclusion

Higher income groups have the capacity to save more and purchase more assets than lower income groups.  Disparities in wealth will reflect this situation.

 

Data

 

Range of Income of All ISA Holders	Holders	Share of holders	Average ISA Market Value	Total market value	Share of holders
£	Nos	%	£	£	%
£0-£4,999	1259387	5.9	18059	22743	3.1
£5,000-£9,999	1683052	7.9	24285	40873	5.6
£10,000-£19,999	5447021	25.6	31563	171924	23.7
£20,000-£29,999	4519161	21.2	31536	142516	19.7
£30,000-£49,999	4792967	22.5	34103	163455	22.5
£50,000-£99,999	2711000	12.7	42747	115887	16.0
£100,000-£149,999	471837	2.2	60160	28386	3.9
£150,000 or more	414323	1.9	94894	39317	5.4
All ranges	21298750	100.0	34044	725101	100

 

 Sources

HMRC Individual Savings Account (ISA) Statistics, September 2025.

 

Department for Levelling Up, Housing and Communities, (17 July 2023), English Housing Survey 2021 to 2022: second homes - fact sheet.

 

Gardiner, L., (19th August 2017), Homes sweet homes – the rise of multiple property ownership in Britain, Resolution Foundation.

https://www.resolutionfoundation.org/comment/homes-sweet-homes-the-rise-of-multiple-property-ownership-in-britain/