Household Finance and Consumption Survey 2023

In 2023, the amount of net wealth needed to be in the top 10% of households had increased by 22% since 2020. Households with a net wealth value greater than €1,024,000 belonged to the wealthiest 10% of all households (the top net wealth decile). To be in the top 10% in 2020, a net wealth of €837,900 was needed. Households in the bottom 10% of the net wealth distribution had a net wealth of less than €2,400, compared with €1,300 in 2020. See figure 3.1, table 3.1 and PxStat table HFC2050.

The average gross wealth for households in the bottom decile was €17,900 compared with €2,563,100 in the top decile. Gross wealth was higher in the bottom decile than the second decile as households in the bottom decile can own assets such as second properties and land but also have debts that exceed their gross wealth, hence giving them a negative net wealth value. See figure 3.2 and PxStat table HFC2055.

As expected, the median values of assets increase by decile. The median value of real assets in the bottom decile was €1,500 compared with €1,340,600 in the top decile. The median value of financial assets in the bottom decile was €500 compared with €188,900 in the top. See figure 3.3 and PxStat table HFC2053.

The household main residence (HMR) accounted for 24.4% of the total gross wealth held by households in the top decile, compared with 52.8% for those in the bottom decile and only 3.2% in the second decile, which consists of mostly renters. Land accounted for 3.7% of gross wealth for households in the bottom decile. This was higher than all other deciles except the top three. See figure 3.4 and PxStat table HFC2059.

In 2023, 4.4% of households in the bottom decile owned the HMR compared with 0.2% in the second decile. Households with a valuable asset, such as the HMR, can find themselves in the bottom decile if they are in negative equity. This is when the outstanding debt on their mortgage is greater than the value of the property. Of all households in the first decile with a mortgage, 64% were in negative equity. In 2023, nationally, 1.9% of households with a mortgage were in negative equity, compared with 4.1% in 2020 and 6.7% in 2018. See figure 3.5 and PxStat table HFC2060.

The fourth decile is the first decile where a significant number of households, 80%, owned the HMR. This was also the decile with the highest median value of debt. For households that have debt in the fourth decile, the median value was €119,600, compared with median values of between €4,100 and €10,500 for the first three deciles. The fourth decile median debt was the highest as it consists primarily of the outstanding balance on HMR mortgages of households that had purchased the dwelling relatively recently. See figure 3.6 and PxStat table HFC2054.

Increases in median net wealth were seen right across the gross income distribution since 2020. Income quintiles divide a population into five equal groups based on income levels. Each quintile represents 20 percent of the population, ranging from the lowest 20 percent (first quintile) to the highest 20 percent (fifth quintile). Households in the middle quintile saw the biggest increase in median net wealth since 2020 with a 62% rise. Those in the second and the top quintiles saw the lowest relative increases at 17% and 18% respectively. See figure 3.7 and PxStat table HFC2038.

Every quintile of the gross income distribution saw an increase in the median value of debt since 2020 except for the fourth where there was a 17% drop. Quintiles where the share of households with a mortgage on the HMR has been decreasing since 2018 tend to see a downward trend in the median value of debt. See figure 3.8 and PxStat table HFC2017.

The likelihood of paying lower interest rates on non-mortgage loans increases with gross household income. In 2023, households in the top quintile of gross income had the lowest median interest rate paid on personal loans of less than €5,000 at 8.1% compared with 9.2% in the first quintile. Similarly on loans greater than €5,000, the top quintile had a median interest rate of 7.2% compared with 9.5% in the first quintile. See figure 3.9 and PxStat table HFC2056.

Lorenz Curve

This Lorenz curve is a graphical representation of the relationship between the cumulative share of households (ranked according to the level of wealth from lowest to highest) and their cumulative share of total wealth. It plots the Lorenz curve of net household wealth for 2020 and 2023. A perfectly equal wealth distribution would be one in which each household has the same wealth, therefore 10% of households would own 10% of cumulative wealth, 20% of households would own 20% of wealth (and so on). This scenario is depicted by the 45^o line, the line of perfect equality. The further away a curve is from the line of perfect equality the more unequal the distribution. Although the difference is negligible, the Lorenz curve for 2020 net household wealth is slightly closer to the line of equality than the 2023 curve, suggesting that net wealth is distributed slightly less evenly in 2023 than in 2020. In 2023, we can see that the top 10% of households owned 50% of all household net wealth and the top 1% owned 13% of all household net wealth. See figure 3.10 and PxStat table HFC2057.

Gini Coefficient

The Gini coefficient is a statistical measure of inequality. A Gini coefficient value of zero denotes perfect equality, indicating that wealth is distributed equally amongst all households. A Gini Coefficient of 1 would denote perfect inequality where all the wealth is held by one household. The Gini coefficient for net wealth in 2023 was 0.66, which is the same as the value for 2020. The corresponding value for 2018 was 0.70.

When interpreting this figure, it is important to note that the HFCS does not capture a significant portion of household wealth in the upper percentiles (i.e. the top 1%). For example, the very wealthiest households in Ireland were not randomly selected in the sample therefore their wealth would not be included in estimates. We can assume that this results in an underestimation of the Gini coefficient for net household wealth.

The Gini coefficient for gross household income was 0.41 in 2023 indicating that net wealth is distributed more unequally than gross household income. See figure 3.11 and PxStat table HFC2057.

The Survey on Income and Living Conditions (SILC) is the official source of income inequality statistics, where income inequality measures are based on equivalised disposable income, rather than on gross household income.