Is there a public consensus on what it means to be rich?
New research shows that people can easily identify what makes you rich, but struggle to agree at what point wealth and income become excessive.
The study, by academics at Loughborough and Birmingham universities and the London School of Economics (LSE), asked the public in London what kinds of goods and services represent a wealthy lifestyle.
The report, Living on Different Incomes in London: Can public consensus identify a ‘riches line’?, was commissioned by the poverty and inequality charity, Trust for London.
It is the first time a study like this has been carried out in the UK.
Spending £100 on a bottle of wine, going sailing, collecting antiques, private healthcare, personal trainers, housekeepers, private education and offshore investments were all indicators of having living standards above normal levels of security and comfort – a standard described as ‘wealthy’ .
These characteristics of wealth were based on the perceptions of members of the public, who identified five levels of lifestyle (A – E), starting with a minimum socially acceptable standard of living (MIS) all the way up to super-rich.
Participants also pointed to non-material advantages of wealth, such as security, power and influence, and freedom of choice.
Lead researcher Abigail Davis, of the Centre for Research in Social Policy (CRSP), at Loughborough, said:
“Understanding these multiple dimensions of attitudes towards wealth and riches is crucial for developing policies that tackle poverty and inequality but work with the grain of the aspirations and perceptions of members of the general public. There is much public and political discourse around economic inequality. But while there is a substantial body of research about attitudes towards, and definitions of, poverty, there is relatively little research about the other end of the spectrum. Just as there is a ‘poverty line’, we wanted to find out if there is an identifiable ‘riches line’, and what it means for society as a whole for individuals to have very high income or wealth.”
London was chosen as the location for the study because economic inequality is clearly visible – some 40% of the population in the capital live below the MIS standard.
Discussions among members of the public were carried out between November 2018 and January 2019.
Participants discussed different aspects relating to living standards, including wealth and finances, education, leisure, holidays, shopping, transport, health and private services.
The participants – six groups of men and women of working age, on incomes ranging from below £20,000 to above £100,000 – were also asked questions about the benefits and harms of wealth, for individuals and for society.
The sessions were recorded and transcribed before being analysed by the team.
They were also asked if they thought there was a point beyond which wealth becomes excessive.
“Overall, participants concluded that it was not easy to judge whether in a particular case someone did or didn’t deserve their wealth, saying that it depended on how people had acquired their fortune and how they chose to use it. They were more critical of those who had inherited money and had not earned it, as well as those who ‘hoarded’ it or were ostentatious, but said that those who had worked hard and used it to create jobs and support charities were more deserving and could provide inspiration to others. The groups did, however, assert that people with lots of money had a duty to improve society and help those less fortunate. People thought that having wealth – and often power and influence as well – is a great responsibility and that it is important that those who are more fortunate should be prepared to use at least some of their money for the good of others in society.”
Tania Burchardt, Director of the Centre for Analysis of Social Exclusion (CASE) at LSE and a co-researcher on the project, said:
"A closer examination of these attitudes could hold clues to whether certain ways to frame proposals for redistribution might be more widely acceptable than others. While the groups in our research were able to find a broad consensus on standards of living well above the minimum, including the wealthy at the top and the super-rich at the very top, they found it much harder to identify and agree on a point beyond which greater resources could be considered excessive. This may reflect people’s current perceptions of precariousness, particularly relating to incomes, employment, housing and health. Wealth was discussed as providing protection against risk and unpredictable changes in circumstances while optimising opportunities and choices.”
Bharat Mehta, Chief Executive at Trust for London said:
“There is widespread public and political concern about economic inequality in the UK today. Views expressed by the public about the perceived advantages of wealth were not just material but included multiple factors such as safety and security, health and well-being, and self-esteem and status. As the government searches for ways to help ‘left-behind’ communities it is useful to understand the multiple dimensions that inform people’s perceptions of what it means to be rich, what ‘richness’ is and what this means for society. It is hoped that this research will contribute to a healthy debate about wealth and inequality.”
What it means to be:
Level C - The (securely) comfortable
- Home ownership
- Savings and investments
- Financial advisor
- Some luxury goods – e.g. designer handbags or handcrafted artisanal items
- Formal childcare
- Full-time private nursery
- Eating out once a week
- Wider range of activities and school trips for children
- At least two holidays a year – possibly skiing
- Comprehensive home entertainment package
- Premium gadgets – iPad, MacBook
- Weekly cleaner and gardener
- Shopping at Waitrose and Marks and Spencer
- Private health insurance
- A pet
Level D - The wealthy
- Access to additional income streams – property rental, shares and dividends, offshore investments
- Private banking and a wealth manager
- Larger home with ‘more bedrooms than you need’ owned outright OR owning more than one home
- Shopping delivered by organic or ‘high end’ retailers
- Additional car – e.g. three cars for a two-adult household
- Five holidays a year
- Privately educated children
- Hobbies include sailing, collecting art/antiques and riding
- Own horse and pay for stabling
- Member of private leisure clubs
- Personal Pilates instructor
- Pedigree pets
The super-rich (Level E) were also discussed, but in less detail.
This group was assumed to have access to or own:
- Many houses owned outright in several countries
- Private jets
- Supercars and yachts
- A range of staff – chauffeur, gardener, dog walker, housekeeper, chef, butler
- Multiple personal assistants
- Professional services (doctors, lawyers) on a retainer so they could be summoned when necessary
- A publicist and someone to deal with public relations
About the research
The methodology is based on the work done by CRSP to establish the Minimum Income Standard (MIS) – the baseline (Level A) used in this study.
MIS is calculated each year and is about having what you need in order to have the opportunities and choices necessary to participate in society.
The research also builds on work at CASE, LSE, on poverty and inequality; and at the Centre on Household Assets and Savings Management (CHASM) at the University of Birmingham on attitudes to wealth and inheritance.
About the researchers
The project was a collaboration between:
Centre for Research in Social Policy (CRSP), Loughborough University: Abigail Davis and Donald Hirsch
Centre for the Analysis of Social Exclusion (CASE), London School of Economics: Tania Burchardt, Ian Gough, Katharina Hecht and Kate Summers
Centre on Household Assets and Social Mobility (CHASM), Birmingham University: Karen Rowlingson
About Trust for London
Trust for London funded the research. The Trust is the largest independent charitable foundation funding work which tackles poverty and inequality in the capital. Each year we provide around £10 million in grants and at any one point are supporting some 400 voluntary and community organisations.