Unequal wealth: Exploring socioeconomic disparities across the EU

Executive summary

Wealth inequality shapes economic and social outcomes, including education, healthcare, housing and upward mobility, which are important elements of social cohesion. This study examines wealth inequality trends across the EU using data from the European Central Bank’s Household Finance and Consumption Survey from 2010 to 2021. Special attention is given to saving behaviours, housing wealth and the wealth accumulation patterns of the middle class.

Policy context

The EU prioritises economic, social and territorial cohesion, reinforced by the European Pillar of Social Rights. Policies such as the European Affordable Housing Plan and the Gender Equality Strategy aim to reduce economic and social disparities between Europeans. Measures including financial literacy initiatives, poverty reduction efforts and tax reforms aim to create equitable opportunities for disadvantaged groups. Addressing low effective tax rates for the top wealth holders could help reduce inequality while supporting public finances. Understanding wealth distribution is crucial for effective policy development.

Key findings

Wealth concentration and inequality trends

• Wealth inequality varies across the EU. Eastern and southern European countries have the lowest levels of inequality, while Germany, Spain and Ireland rank among the most unequal. Negative wealth (where people’s debts exceed their assets) is more common in northern and western Europe due to high non-mortgage debt.
• Wealth inequality remained largely unchanged from 2010 to 2021, although some convergence of countries occurred. Countries with high levels of inequality historically saw slight reductions, whereas countries like Slovenia and Spain, with low inequality in 2010, experienced increases.
• Wealth distribution is highly unequal and exceeds income inequality. The top 5 % of the wealth distribution controls a disproportionately large share of wealth, while the bottom 20 % often holds negligible or negative net wealth. But there is variation: the wealthiest 5 % of the population holds a much smaller share of total wealth in Slovakia (25 %) than in Estonia (46 %).
• Income inequality and wealth inequality do not always align. Austria, Finland and Denmark have low income inequality but high wealth inequality.

Social differences in wealth

• In single-person households, men generally have more wealth than women. At higher wealth levels, the gender gap is more pronounced. Men also hold more diversified and higher-yield assets.
• Wealth peaks at ages 55–64 and declines thereafter. Younger people have less wealth and are less likely to own high-yield assets. Inheritances widen the wealth gap between those who receive them and those who do not. However, it has an equalising effect when measured only among recipients.
• Higher education correlates with greater wealth, suggesting bidirectional causation: wealthier families can provide better education for their children, and higher education leads to better jobs and higher incomes.
• The self-employed are over-represented in the top 10 % wealth bracket.
• Non-EU migrant families tend to have lower wealth. In Cyprus, Austria, Greece, Finland and Italy, over 80% of non-EU-born people are in the bottom 50 % of the wealth distribution.

Saving patterns

• Saving rates rise with income and are higher among employees, individuals with lower educational attainment, women, younger households, homeowners and smaller households. However, higher saving rates do not always translate into higher absolute savings.
• The main motives behind saving behaviour are as a precaution against unexpected events and retirement. Younger households prioritise homeownership, while middle-aged people focus on retirement savings. Larger households allocate more towards education and child support.
• Lower-wealth households increased their saving rates significantly between 2017 and 2021 in some countries (such as Cyprus, Estonia and Slovakia), while in others (for example, Spain, Belgium and Germany) the wealthiest 10 % increased their saving rates most.

Housing wealth and inequality

• Housing wealth trends vary across the EU: rising property prices boosted wealth in most countries, although some saw declines. Housing wealth is more evenly distributed than non-housing wealth. Countries with higher homeownership rates, like Czechia and Slovakia, exhibit lower overall wealth inequality than those with high tenant populations, like Germany and the Netherlands.
• The distribution of housing status substantially differs between countries and has remained largely unchanged, with renters disproportionately represented among lower-wealth and lower-income households.
• Housing is the primary asset of middle- and lower-wealth households. Housing costs range from 15 % to 35 % of gross household income across the EU. Renters face a higher cost burden than mortgage holders due to lower incomes.
• Lower-income mortgage holders face financial strains, with housing costs exceeding 30 % of gross income in all 22 countries surveyed. In some countries, such as Latvia, Slovakia, Slovenia and Greece, mortgage payments consume nearly all household income. Rental costs are similarly excessive for low-income households in many Member States.
• A 20 % rise in housing costs would sharply worsen affordability, especially in Belgium, Cyprus, Finland, Slovakia and Spain.
• More young adults staying in parental homes reflects housing inaccessibility, driven largely by rising costs relative to income, beyond cultural factors.
• Single mothers have lower homeownership and higher housing costs than two-parent families in all countries.

Wealth and the middle class

• The middle class generally holds a smaller share of wealth than its population share, due to wealth concentration at the top of the wealth distribution. People with a secondary education comprise the largest share of the middle class; the largest occupational groups are professionals, clerical workers, and services and sales workers.
• Despite persistent class membership, upward and downward mobility are significant: 11–29 % of individuals in the lower class transitioned to the middle class between 2017 and 2021. Mobility is lower when the middle class is defined by wealth rather than income, indicating that wealth status is more persistent than income status.
• Higher educational attainment is associated with greater upward mobility and lower downward mobility in every class. It shields people from slipping from the middle to the lower class and from the upper to the lower class and is also associated with a higher probability of moving from the middle to the upper class and staying there.
• Younger households have higher upward mobility potential, while older households face greater risks of downward mobility. Homeownership stabilises middleclass status and enhances upward mobility. Single-parent households, the unemployed and those with lower educational levels are more exposed to downward movement and have less chance of upward mobility.

Policy pointers

• A compulsory EU-wide wealth declaration integrated with the tax filings of EU citizens could enhance transparency, improve monitoring of wealth distribution and support effective social policy design. It would also combat hidden wealth and encourage financial awareness without necessarily increasing or harmonising wealth taxation.
• Improving financial literacy is crucial for better financial decision-making, particularly among women, low-wealth individuals and young people. Member States could integrate financial education into curricula and offer lifelong learning opportunities.
• Progressive wealth taxation could address concerns about wealth inequality and compensate somewhat for the ability of wealthy households to reduce their tax load, while generating revenue. However, implementation requires EU-wide cooperation and careful design to balance equity and efficiency.
• Policies should prioritise affordable rental housing, improved social housing systems and targeted support for high-cost burdens, as rising housing costs disproportionately affect young people and renters, particularly in vulnerable groups like single mothers. Demand-side incentives for homeownership should be calibrated not to worsen affordability.
• Targeted energy-efficient renovation subsidies for low-income groups can reduce utility costs, lower housing burdens and improve financial stability while supporting environmental goals.
• Addressing the significant disparities in women’s wealth requires comprehensive policies, including affordable childcare and elderly care and pension system adjustments. Tackling these issues will help reduce the economic vulnerabilities faced by women, especially single mothers and older women, and promote equality.