Millions more become millionaires during pandemic as property prices soar

Household wealth increased to another record in 2020

A rise in house prices was a large factor in the increase in wealth in 2020 (PA)

More than five million people worldwide became millionaires last year, despite the economic disruption caused by coronavirus.

Household wealth also increased to another record in 2020, thanks to soaring house prices and the stock market, the latest global wealth report by Credit Suisse has revealed.

The research found wealth per adult rose 6 per cent last year to hit another high of 79,952 US dollars (£57,598) and total household wealth grew by 7.4 per cent, or 28.7 trillion US dollars (£20.7 trillion) to 418.3 trillion US dollars (£301.3 trillion).

The boost to household wealth in 2020 meant there were 56.1 million millionaires worldwide last year, up 5.2 million on the previous year.

Anthony Shorrocks, economist and author of the report, said: “Global wealth not only held steady in the face of such turmoil but in fact rapidly increased in the second half of the year.

“Indeed wealth creation in 2020 appears to have been completely detached from the economic woes resulting from Covid-19.

“If asset price increases are set aside, then global household wealth may well have fallen.”

The study also estimated that 17.5 trillion US dollars (£12.6 trillion) was lost from total global household wealth between January and March 2020 at the start of the crisis.

However this was largely reversed by the end of June due to stock markets recovering and soaring house prices.

The report found that home-owners and those with large share portfolios benefited the most last year, with rising asset prices largely lining the pockets of late middle age individuals, men, and wealthier groups in general.

It came as central banks, including the Bank of England, slashed interest rates to historic lows and launched massive money-printing programmes to offset the economic hit from the pandemic, while governments have unleashed huge support schemes.

Nannette Hechler-Fayd’herbe, chief investment officer of international wealth management and global head of economics and research at Credit Suisse, said: “There is no denying actions taken by governments and central banks to organise massive income transfer programmes to support the individuals and businesses most adversely affected by the pandemic, and by lowering interest rates, have successfully averted a full scale global crisis.”

She added: “The lowering of interest rates by central banks has probably had the greatest impact.

“It is a major reason why share prices and house prices have flourished, and these translate directly into our valuations of household wealth.”

Additional reporting by PA