Sunday 19 November 2017

Half of Irish adults now qualify as 'middle class', says wealth survey

Credit Suisse
Credit Suisse
Colm Kelpie

Colm Kelpie

Half of all adults in Ireland are middle class, according to a banking giant.

Swiss bank Credit Suisse, which made the assessment, also ranked Ireland among the world's 10 fastest wealth-growing countries over the past five years.

In the previous five years, however, as the country moved from boom to bust, it was among the countries that saw the largest declines in wealth, the bank said.

The banking group said that more than 50pc of adults qualify as middle class in Ireland, with 57.7pc in the middle class or beyond bracket. More than 55pc qualify as middle class in Italy, Japan, Spain, Taiwan, the United Arab Emirates and the UK.

The figure exceeds 60pc in Belgium and Singapore, and is highest in Australia, where 66pc of adults are in the middle-class bracket and 80pc belong to the middle class or higher.

In the United States, Credit Suisse said just 37.7pc were middle class, with half of the population in the middle class or higher bracket.

And for the first time, it said there were now more middle class in China than there were in the United States, at 109 million versus 92 million.

In the report, 'middle class' is defined in terms of a wealth band rather than an income range and is benchmarked against the US. Wealth is used instead of income, it said, because the latter misses elements of freedom and security. Using an income definition would mean that a spell of unemployment can cause middle class status to evaporate.

The report said a middle- class adult in the US is defined as having wealth from $50,000-$500,000, therefore the band is reasonably wide.

Meanwhile, Credit Suisse's latest study on global wealth found that wealth inequality overall is rising, with half of the world's wealth now in the hands of just 1pc of the population.

The banking giant estimated that 3.4 billion people had wealth below $10,000 each in 2015.

The number of dollar millionaires is expected to rise 46.2pc to a record 49.3 million over the next five years, driven by China, the bank said.

Switzerland is likely to remain the richest nation in terms of individual wealth, followed by New Zealand.

"Sweden could surprise by gaining the world's third spot," the bank said.

Total global wealth has doubled since 2000, with a fivefold rise in China and lower, but still rapid, growth in India.

"The middle class will continue to expand in emerging economies overall, with a lion's share of that growth to occur in Asia. As a result, we will see changing consumption patterns as well as societal changes as, historically, the middle class has acted as an agent of stability and prosperity," the bank said.

Growth in the eurozone was generally below average.

The report notes that while the number of millionaires has risen quickly, median wealth has stagnated since the financial crisis.

The bank's assessment found that middle-class wealth has grown at a slower pace than wealth at the top end.

This had reversed the pre-crisis trend, which saw the share of middle-class wealth remaining fairly stable over time, it stated.

Irish Independent

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