Savings and property help define new middle class, reveals study

Fri, 05 May 2006

The middle classes have grown by almost half in the last 40 years, with financial factors such as mortgages and savings accounts helping to define them, suggests a report.

Currently over 50 per cent of Brits are working class, but the middle classes are set to overtake them by 2020, according to research from Liverpool Victoria, the UK's largest friendly society.

The report suggests that rather than the traditional differentiating factors of education, family and job, it is savings , investments and property that divide the classes.

Today's middle classes reportedly have twice as much as the working class in savings, with them taking a more long-term view on financial matters.

Only a fifth of working class people said they saved for the long-term, compared to three out of ten middle class people.

Similarly, far fewer working class people are putting anything away for a pension scheme , with almost half saying they lived for the moment. Only 29 per cent of the middle classes took this perspective on life.

In terms of property, there were found to be similar levels of home ownership, but middle classes tended to have more expensive homes.

More middle class people owned their home outright without any mortgage than working class property owners.

Income has also helped defined middle classes to a certain degree, with a wealth gap of over £104,000 between them and the working classes.

However the research also revealed that the class distinctions are blurring, with a 'Muddle Class' emerging. For instance, researchers coined the term HEWs (high earning workers) for the half a million people in the UK who earn more that £100,000 in household income, yet say they are still working class.

At the other end of the scale, there are the SALs (suburban asset lightweights) which they say refer to the 1.84 million people who believe they are middle class, yet are asset poor.

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