The number of Britons who regard themselves as middle class has risen by nearly a half (44%) in the last 40 years, according to new research from Liverpool Victoria, the UK’s largest friendly society*.

The new ‘Middle Britain’ report shows that although over half of the population say they are working class (53%), over four in ten Britons (43%) now see themselves as middle class. This is a rise of 44% since 1966, when just 30% of the population regarded themselves as middle class. Moreover, the research predicts that by 2020 more UK adults will regard themselves as middle class than working class.

The report also reveals a huge wealth gap between the middle and working classes of over £104,000 in individual wealth, which means a massive wealth gap across the UK as a whole. This is despite the fact that working class disposable incomes have risen considerably in the last 20 years, to the extent that even after discounting inflation they now exceed the level of middle class incomes in the 1980s.

The new ‘Middle Britain’ research report was conducted for Liverpool Victoria by independent think tank The Future Foundation, and comprises desk research from the British Household Panel Survey and the British Election Survey, plus new consumer omnibus research.

‘Muddle Class’ Britain
The report also suggests that ‘Muddle Class’ (as opposed to middle class) Britain may be a more appropriate description of today’s society, as some new class types are emerging that defy traditional class differentiators, namely:

• ROBs (Rich Ordinary Britons) – the 2.67million people who regard themselves as working class even though their wealth ranks them in the top fifth of the population for asset wealth.
• HEWs (High Earning Workers) – the half a million people in the UK (534,000) who earn over £100,000 per year in household income, yet still claim they are working class. The nation’s HEWs are worth £53bn in total.
• SALs (Suburban Asset Lightweights) – the 1.84 million people who call themselves middle class, yet are asset poor and in the bottom fifth of the population in terms of asset wealth.

The research also revealed a significant number of profession mismatches, such as the 36% of builders regarding themselves as middle class, and the three out of ten bank managers (29%) who see themselves as working class.

Traditional class differentiators changing
The report also shows that the traditional class markers such as family background, education and job, whilst still important, are being joined by savings, investments and property indicators. There are also some differences in perception between the middle and working classes as to what constitute the key class markers.

The working classes rate income as a more important factor than do the middle classes, whereas the latter regard education and housing as more significant than do their working class counterparts.

Key class markers
Category Importance in defining class

Income & debt
According to the Middle Britain report, the average middle class full-time worker earns a quarter more annually than their working class counterpart, £25,485 compared with £20,553. However, age is important here, as up to age 24 the average working class income is 16% higher. However, after age 45 the middle classes begin to cash in on their status, earning 54% more than their working class equivalents at this age.

• The higher middle class earnings may be due in part to better education, as they are four times more likely to have a degree than the working classes.
• The majority of chief income earners work in non-manual jobs, showing a shift away from the traditional association of the working class with manual jobs.
• Interestingly, the report also shows that the working classes believe they work hardest for their money:

Working hard is most characteristic of:

On debt, the Middle Britain report shows that the average amount of debt (excluding mortgage debt) owed by the middle classes is £3,267 and by the working classes is £2,770, although the overall debt burden for the latter is greater due to their lower income.

Savings and investments
The middle classes have twice as much as their working class counterparts in savings and almost three times as much in investments (eg stocks and shares). Attitudes towards savings also differ markedly between the classes, with the working classes seeming to take a shorter term approach.

Only one in five of the working class say they save for the long term, compared with three out of ten middle class people. Also, whilst one in three of the middle classes are saving for their retirement, this falls to one in five for the working classes.

When it comes to spending, half of the working classes say they live for the moment (48%), compared with less than a third of the middle classes (29%).

Middle class meanies
The middle classes are twice as mean with their money as the working classes. According to the Liverpool Victoria survey, 23% of middle class respondents admitted to being mean with their money, compared with just 12% of working class respondents saying the same.

A nation of homeowners
The Middle Britain report indicates a similar level of home ownership between the classes (84% among middle and 75% among working classes) but middle class homes are worth some 70% more than working class equivalents. In addition, four in ten of the middle classes own their home outright, with no mortgage, compared with less than three in ten for the working classes.

• The average value of a middle class home is £220,000, 70% higher than that of a working class home (£129,000).
• The percentage of middle class homeowners (including mortgagors) is 84.4%, 12.5% higher than among the working classes (75%).
• The middle classes are 77% more likely to own a home outright than the working classes (39.5% of middle classes own a home outright, compared with 28.8% of the working class).

How the assets add up

Nigel Snell, Liverpool Victoria’s Head of Corporate Communications, said: “Classical definitions of class are changing, with financial measures such as income, investments and property assets becoming as significant as where you live or your education.

“The wealth gap between the classes is significant and may be compounded by the shorter-term attitude to saving and slightly higher debt burden of the working classes. Saving regularly for the future is something that we should all be doing more of and we would encourage everyone to try to put something by, if only a little and often, to help build up a nest egg for the future.”

Other key statistics from the Middle Britain report

* Association of Friendly Societies Year Book 2005/2006, total net assets

For further information please call:

Kate Coney, Katherine Hart at Liverpool Victoria: 01202 502204
Dan Smith, Tristan Pineiro, Adam Kea at Fishburn Hedges: 020 7839 4321

Liverpool Victoria

Liverpool Victoria Friendly Society Ltd was founded in 1843 and is the UK’s largest friendly society.

As a mutual organisation owned by its members, the friendly society does not have to pay dividends to shareholders and can therefore use profits to the advantage of members to provide competitive rates and terms of cover, good customer service, and attractive policy returns.

The Liverpool Victoria group of companies has more than 2.5 million members and customers, who trust them to manage over £8 billion on their behalf. Liverpool Victoria provides a broad range of financial services including life assurance, general insurance, asset management, banking services and whole of market financial advice, and is the only friendly society to own a bank.

Liverpool Victoria is authorised and regulated by the Financial Services Authority (FSA) and is a member of the ABI, AFS, ILAG & AMI (the Association of Mutual Insurers). Liverpool Victoria is a founding member of AMI, a trade association formed specifically for mutual insurers in September 2004. Liverpool Victoria supports AMI's work of representing the UK mutual insurance industry in lobbying and communicating with bodies such as the FSA, UK Treasury, politicians, the European Union, the International Association of Insurance Supervisors, and the International Accounting Standards Board.

Investment Advice is provided by Liverpool Victoria Financial Advice Services Limited. Liverpool Victoria Financial Advice Services Limited, registered in England No. 3027145, authorised and regulated by the Financial Services Authority and entered on the Financial Services Authority Register, No. 186890.

Liverpool Victoria Friendly Society Ltd is authorised and regulated by the Financial Services Authority and entered on the Financial Services Authority Register, number 110035. Registered address: County Gates, Bournemouth, BH1 2NF. Telephone number: 01202 292333

Future Foundation

The Future Foundation is a leading international consumer think-tank and strategic consultancy. Specialising in understanding socio-economic change and consumer behaviour, the Future Foundation provides intelligent research, analysis and commentary. Research and analysis is used in development of new products and services, to inspire marketing and communications programmes, and to instil awareness of the wider operating environment throughout client organisations.

Current clients range across most sectors and in many countries, they include over 140 organisations including financial services, manufacturing, automotive through to advertising agencies and government departments.