According to the Bank of Spain, the net wealth of Spanish households increased by 4.6% in 2020, the year of the pandemic
The net wealth of households in Spain (the statistic that includes everything from real estate to pension funds or stocks) increased by 4.6% in the year of the pandemic, in 2020, to 122,000 euros, compared to 116,600 in 2017, as reported in the 2020 Household Financial Survey published today by the Bank of Spain. This paper analyzes the changes that have occurred in the financial situation of households over these four years. Average wealth (the difference between the total value of assets and their debts) also increased by 5.6%, from 255,500 euros in 2017 to 269,900 euros in 2020, a year last marked by the arrival of the pandemic in Spain. The average income increased by 10.8% in 2019 to 38,900 euros.
Despite these increases, the supervisor statistic also hides another reality. The one that shows how the levels of inequality in Spain are “relatively limited” compared to other countries in the European environment, mainly “because of home ownership, because that helps to reduce those levels of inequality”, according to the director-general of Economics and Statistics, Ángel Gavilán, who directed this report. Despite this, the richest 10% of the population amassed 53.9% of the wealth, three tenths more than in 2017; 5% hoarded 41% of the wealth (four tenths more), and the richest 1% had 22% of the wealth (1.1 points more).
The Bank of Spain shows that housing is the most important asset of families. 73.9% owned a main home in 2020, compared to 75.9% in 2017. Thus, home ownership loses relative weight in favor of other real estate and businesses as net wealth increases. 36.1% of people under the age of 35 owned their main residence, a figure that has also been declining since 2011. In addition, 45.4% of Spanish households owned financial assets in 2020, excluding bank accounts.
The regulator believes that the increase in household wealth “breaks the downward trend” recorded in the 2011-2017 period, which recorded a 27% decrease, although this increase “hides” “very different” variations by groups of older people .
For example, the median wealth for young households increased significantly to 23,900 euros, for which low levels were observed in 2014 and 2017, around 5,000 euros. Yet these levels are still “much lower” than those of this group in 2011, which stood at EUR 72,630. Median wealth also increased in 2020 for households with heads aged 65 or over or between 35 and 44, for households with an employed head and for households with a retired head.
However, the Bank of Spain warns against the decline in the wealth of lower-income households. In concrete terms, the median wealth of families with an income of less than 20,000 euros was 40,600 euros in 2020, 15% less than in 2017. In addition, the median wealth of families with an income of less than 25,000 euros was 400 euros; when in 2011 this value was 7,100 euros.
Median net wealth also declined for households where the head of household was self-employed, down 5%, and for households where the head of the household was unemployed or inactive, with median wealth falling by 25% in 2020.
Average wealth increased by 5.6%, from 255,500 euros in 2017 to 269,900 euros in 2020, a year marked by the arrival of the pandemic in Spain. The average income increased by 10.8% in 2019 to 38,900 euros.
In terms of debt, that of households as a whole represented 11.4% of the total value of their assets at the end of 2020, and 57.1% of households had some type of debt, the highest percentage since 2002, although the median amount of outstanding debt decreased to 33,300 euros, 6.2% less than in 2017.
61.7% of the debt was driven by the purchase of the main house, with a median debt of 65,000 euros, followed by the purchase of other real estate (22.4%) and other outstanding debts (116%), such as the purchase of a car and other durable goods, home improvement, debt forgiveness and business financing.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
