Interest rate rises caused sharp drop in UK household wealth, report finds

Resolution Foundation says higher interest rates have led to a fall in house prices and pension pots

The recent rise in interest rates has been blamed for ending Britain's wealth boom and causing total household wealth to plunge by a quarter since the Covid-19 pandemic.

A report by the Resolution Foundation, a thinktank, and Financial Fairness Trust - an independent charity historically funded by Standard Life now known as abrdn - said the fall was due to a drop in house prices and pension pots, which account for about 4 out of every 5 of total wealth, and played a leading role in rising wealth across the country over the 40 years leading up to the pandemic.