The UK national balance sheet estimates: 2015

Annual estimates of the market value of financial and non-financial assets for the UK, providing a measure of the nation's wealth.

This is not the latest release. View latest release

This is an accredited national statistic.

Contact:
Email Stephanie Duff

Release date:
26 November 2015

Next release:
To be announced

1. Main points

  • The National Balance Sheet is a measure of the wealth, or total net worth, of the UK. It shows the estimated market value of financial assets, such as loans, and non-financial assets, such as dwellings. Market value is an estimate of how much these assets would sell for, if sold on the market

  • The estimates in this release cover the period 1997 to 2014. All data referred to in this bulletin are annual estimates at current prices

  • At the end of 2014, the total net worth of the UK was estimated at £8.1 trillion. This was equivalent to an average of £125,000 per person or £302,000 per household

  • Dwellings remained the most valuable non-financial asset in the UK at £5.1 trillion, accounting for 63% of the UK’s total net worth at the end of 2014. Dwellings increased in value by £408 billion (9%) over the period 2013 to 2014

  • The households and non-profit institutions serving households (NPISH) sector provided the largest increase in the total net worth of the UK in 2014. This sector increased in value by £1.03 trillion (12%) over the period 2013 to 2014

  • Financial corporations placed the largest downward pressure on the total net worth of the UK between 2013 and 2014. This can be mainly attributed to a decrease of £175 billion (16%) in their estimated financial net worth of “equity and investment fund shares/units”

Back to table of contents

2. Introduction

This annual bulletin provides estimates of the market value of financial and non-financial assets in the UK for the period 1997 to 2014. The National Balance Sheet is a measure of the wealth of the UK and is available by institutional sector, for example, households and non-profit institutions serving households (NPISH) and type of asset, for example, dwellings and loans. The data are used to monitor economic performance, to inform monetary and fiscal policy decisions and for international comparisons.

All data referred to in this bulletin are annual estimates at current prices and include changes in prices as well as in the volume of assets.

These estimates are consistent with the 2015 UK National Accounts (The Blue Book). The dataset for this bulletin is available in the accompanying spreadsheet as well as in Chapter 9 of the Blue Book. Background notes provide information on coverage, quality and how to use the data.

The institutional sector and asset breakdown of non-financial corporations, into public non-financial corporations and private non-financial corporations are not available from the net capital stocks dataset. As a result, these data and the totals that are derived from these data are not shown in the tables accompanying this bulletin.

As part of the continuous improvement process, there are revisions to the estimates for the period 1997 to 2013; further details are available in the background notes section.

Back to table of contents

3. Total net worth

Estimates of UK total net worth more than doubled in the 15 years from 1999 to 2014, at current prices. Since 1997, they have risen consistently until the economic downturn in 2008 and 2009. From 2010 onwards they have risen in most years, with the exception of 2012.

At the end of 2014, the UK was valued at an estimated £8.1 trillion, an increase of 5% (£385 billion) compared with 2013, which continued the long-term upward pattern. This is consistent with the continued growth in the value of gross domestic product (GDP) at current prices during 2014.

The estimated value of non-financial assets increased by £595 billion (8%) while the estimated financial net worth decreased by £210 billion (86%). The increase in the value of non-financial assets was largely due to dwellings which contributed to 63% of the UK total net worth at the end of 2014.

UK total net worth was equivalent to an average of £125,000 per person or £302,000 per household in 2014, compared with £120,000 per person or £288,000 per household in 2013.

Back to table of contents

4. Analysis by institutional sector

Households and non-profit institutions serving households (NPISH)

The households and NPISH sector had an estimated net worth of £9.4 trillion at the end of 2014, making it the institutional sector with the highest total net worth. This was equivalent to an average of £354,000 per household in 2014 compared with £316,000 per household in 2013.

NPISH consist of organisations such as charities, universities, churches and trade unions, which provide goods and services to households either free or at non-economically significant prices.

The most valuable assets in this sector were dwellings (£4.8 trillion; 51% of this sector’s net worth), “insurance, pension and standardised guarantee schemes” (£3.5 trillion; 37%) and “currency and deposits” (£1.4 trillion; 15%).

The estimated net worth of households and NPISH increased by £1.03 trillion (12%) between 2013 and 2014, which was the largest annual increase since 2008 and the main reason for the increase in the total net worth of the UK. In comparison, the estimated total net worth of the UK only increased by £385 billion because of decreases in other sectors.

The increase in the estimated net worth of households and NPISH in 2014 resulted from increases in a number of different assets. The largest increase was in the net value of “insurance, pension and standardised guarantee schemes” which increased by £501 billion (17%) due to an increase in the asset value to £3.5 trillion compared with £3.0 trillion at the end of 2013. See background note 2 for further information. The value of dwellings saw an increase of £403 billion (9%) compared with 2013.

Non-financial corporations

The non-financial corporations sector had an estimated net worth of minus £732 billion at the end of 2014, a decrease of £54 billion (8%) compared with 2013.

The non-financial sector is broken down into 2 sub-sectors: public and private. Non-financial corporations produce goods and services for final or intermediate consumption expenditure and include businesses such as retailers, manufacturers, utilities and construction companies, amongst others.

At the end 2014, the most valuable asset of non-financial corporations was “other buildings and structures” at £939 billion (45% of this sector’s total non-financial assets), which increased by £124 billion (15%) compared with £814 billion at the end of 2013.

This increase was offset by decreases of £154 billion in the net value of “insurance, pension and standardised guarantee schemes” and £133 billion in the net value of “equity and investment fund shares/units”.

Financial corporations

The financial corporations sector had an estimated net worth of minus £197 billion at the end of 2014, a decrease of £364 billion (219%) compared with 2013. This was the largest annual decrease and the first negative net worth for financial corporations since 2006.

Financial corporations are institutional units whose principal activity is the production of financial services and, for example, include banks, building societies and insurance companies.

The financial net worth of financial corporations decreased by £367 billion to minus £360 billion in 2014 compared with £7 billion in 2013 and was the main contributing factor for the fall in this sector. This was a result of a decrease of £353 billion in the net value of “insurance, pension and standardised guarantee schemes” due to an increase in the liability value to £3.6 trillion in 2014 compared with £3.1 trillion in 2013.

There was also a decrease of £175 billion in the net value of “equity and investment fund shares/units”, but this was mostly offset by an increase of £158 billion in the net value of “debt securities” over the period 2013 to 2014.

General government

General government continued to place downward pressure on the UK total net worth in the period 2013 to 2014. The estimated net worth of the general government sector decreased to minus £450 billion at the end of 2014, meaning that the government continued to owe more than it owned in assets.

General government’s estimated financial net worth decreased by £255 billion (21%) to minus £1.5 trillion in 2014 compared with minus £1.2 trillion in 2013, the largest annual decrease since 2011. This was mainly due to central government’s increased liabilities in “debt securities”. The most valuable non-financial asset of general government was “other buildings and structures” at £766 billion and accounted for 75% of this sector’s total non-financial assets at the end of 2014.

The general government sector is broken down into 2 sub-sectors: central and local. General government includes government departments and agencies, local authorities, the armed forces, and the police, amongst other public bodies.

Central government’s net worth is estimated to have declined in every year since 2001. Figure 2 shows that the estimated net worth of the central government sub-sector was minus £1,009 billion at the end of 2014. This was a decrease of 34% on the previous year and over 6 times less than its net worth in the pre-downturn period of 2007 (minus £148 billion).

Local government’s estimated net worth has increased gradually since 2002 with the exception of decreases in 2008 and 2009, during the economic downturn. At the end of 2014, the estimated net worth of the local government sub-sector was £559 billion and this was its highest value since its peak in 2007.

Back to table of contents

5. Analysis by type of asset

In this release, the focus is placed on the analysis of 5 assets:

  • dwellings

  • other buildings and structures

  • machinery, equipment and weapons systems

  • equity and investment fund shares/units

  • financial derivatives and employee stock options

Dwellings

Dwellings remained the most valuable non-financial asset in the UK. They steadily increased in value between 1997 and 2014, except for a decrease in 2008. The value of dwellings was estimated at £5.1 trillion at the end of 2014, over 3 times their estimated value in 1997 (at £1.4 trillion). The households and non-profit institutions serving households (NPISH) sector accounts for 95% of this asset’s value. The increase in the value of dwellings was largely due to increases in house prices rather than a change in the volume of dwellings. Between the end of 1997 and the end of 2014, the simple average house price in the UK increased by 249% in comparison with the value of dwellings which increased by 255%.

Other buildings and structures

The estimated value of “other buildings and structures” increased by £158 billion (9%) to £1.9 trillion in 2014 compared with £1.7 trillion in 2013. The value of these assets accounted for 24% of the UK’s total net worth at the end of 2014. “Other buildings and structures” includes non-residential buildings such as warehouses as well as other structures such as roads, railways, pipelines, bridges and sports stadiums.

The estimated value of “other buildings and structures” has increased each year since 1997 with the exception of 2008, 2009 and 2012. These assets have doubled in value since 1997 from £947 billion to £1.9 trillion at the end of 2014.

Machinery, equipment and weapons systems

This asset group includes “transport equipment”, “information and communication technology (ICT) equipment” and “other machinery, equipment and weapons systems” and had an estimated net worth of £850 billion at the end of 2014, an increase of £6 billion since 2013. The value of these assets accounted for 11% of the UK’s total net worth at the end of 2014. There has been steady growth in the value of these assets since 1997 with the exception of 2013 which was relatively flat. This group has grown more slowly since 2009 than the other groups of non-financial assets in Figure 3.

Equity and investment fund shares/units

Equity and investment fund shares/units relate to the issuance and holdings of listed and unlisted shares, other UK equity and mutual funds units/shares. In 2014 the estimated net worth of these assets fell by £218 billion (71%) to £90 billion in 2014 compared with £308 billion in 2013. This was the largest annual decrease since 1997. The decrease in the total financial net worth of the UK was largely due to the change in the net value of these assets. This is a result of the asset value decreasing with a corresponding increase in the liability value of “equity and investment fund shares/units” in both the financial corporations and private non-financial corporations sectors.

Financial derivatives and employee stock options

A derivative is a contract between 2 parties whose value is derived from 1 or more underlying assets, commodities or currency. Derivatives are in general either used to hedge risks or to speculate on changes in prices. Activity in these types of financial products often increase at times of uncertainty with the financial markets. The estimated net worth of “financial derivatives and employee stock options” decreased by £25 billion (53%) to £22 billion in 2014 compared with £48 billion in 2013. They however, remain at a level that is higher than their value in 2007 (minus £14 billion) which may reflect the continuing economic uncertainty.

Back to table of contents

6. International comparison

In this section, the net worth of the UK is compared with the net worth of the other G7 countries. Estimates for non-produced assets and inventories, and hence net worth, were not available for all the countries shown. Figures 4 and 5 therefore show the produced fixed assets for these countries.

Figure 4 shows as of the end of 2013, all G7 countries had returned to positive growth after the economic downturn of 2008 and 2009. In comparison with other G7 countries, the UK exhibited strong growth in produced fixed assets at 4.3%, above the G7 average of 2.9%, over the period 2012 to 2013. However, in 2008 the UK had the largest fall in the value of produced fixed assets for any country over the entire time period. At the end of 2013, the US had the highest growth rate for produced fixed assets at 4.6%.

Figure 5 shows the value of produced fixed assets of the G7 economies per person in pounds sterling. The UK had the highest estimate per person at £119,000 at the end of 2013 whilst Japan had the lowest at £69,000 per person at the end of 2013.

A positive financial net worth means that the values of the financial assets outweigh the value of the liabilities. Figure 6 shows the financial net worth of the G7 economies at the end of 2013 converted to pounds sterling. Japan had the highest financial net worth at £1.9 trillion, while Italy had the lowest at minus £0.4 trillion. At the end of 2013, the UK, Italy and France had negative financial net worth, meaning that their total liabilities are greater than their total assets.

Back to table of contents

7. Summary tables

Back to table of contents

8 .Background notes

  1. General information

    In addition to the information below, further information is available in the non-financial balance sheet quality report.

    The National Balance Sheet dataset was published in Chapter 9 of the 2015 UK National Accounts (The Blue Book).

    The estimates in this release cover the period 1997 to 2014. All data referred to in this bulletin are annual estimates at current prices and include changes in prices as well as in the volume of assets.

    The population estimates of 64.6 million for 2014 and 64.1 million for 2013 used to derive net worth per person are consistent with the Mid-year Population Estimates for the UK.

    The household estimates of 26.7 million for 2014 and 26.7 million for 2013 used to derive net worth per household are consistent with the Families and Households Estimates for the UK.

    Data on simple average house prices comes from taking the Quarter 4 (October to December) data from Table 11 “Simple average house prices, by new/other dwellings, type of buyer and region, UK” from the House Price Index dataset.

    The net worth estimates of the UK economy exclude “human capital”, that is, the value of knowledge, skills and know-how, and “environmental or natural capital”. Further information on human capital is available from our website.

  2. What’s new?

    The National Balance Sheet estimates are consistent with the net capital stocks estimates due to be published in the Capital Stocks and Consumption of Fixed Capital statistical release on 1 December 2015.

    A number of improvements and changes to the methodology for estimating capital stocks and the consumption of fixed capital have led to revisions to the National Balance Sheet. These changes were presented in the article methodological changes to the estimation of capital stocks and consumption of fixed capital (269.4 Kb Pdf) on 11 September 2015 and can be summarised as:

    • review of the linking of pre-1997 (“historic”) gross fixed capital formation (GFCF) estimates
    • review of deflator linking between 1996 and 1997
    • implementing improved deflators for assets “Software and Databases” and “Mineral Exploration”
    • re-classification of Network Rail from private non-financial corporation to central government
    • estimates for public corporations and NPISH institutional sectors are forecast from 2013 onwards, as opposed to coming from the perpetual inventory model (PIM)

    Revisions to gross fixed capital formation (GFCF):

    Data changes:

    • alignment with GFCF – using GFCF consistent with Blue Book 2015

    An assessment of the impact of these changes are due to be presented in the article impact of the methodological changes to the estimation of capital stocks and consumption of fixed capital published alongside the Capital Stocks and Consumption of Fixed Capital statistical release on 1 December 2015.

    The 3G and 4G electro-magnetic spectrums are no longer classified as non-produced assets in radio spectra. The impact of this change decreases the estimated UK total net worth by £22.5 billion a year over the period 2000 to 2012 and by £24.8 billion in 2013.

    Details of methodological improvements introduced in Blue Book 2015 affecting “insurance, pension and standardised guarantee schemes” are provided in the impact of changes article published on 30 September 2014 (814.6 Kb Pdf) and the impact of changes article published on 30 September 2015. (373.7 Kb Pdf)

    The next publication of Capital Stocks and Consumption of Fixed Capital will be published in August 2016 and will contain estimates back to 1995, hence, the next publication of the National Balance Sheet, also in August 2016, will contain estimates back to 1995.

  3. Understanding the data

    Short guide to the national balance sheet

    The national balance sheet data presents the estimated market value of financial and non-financial assets, that is, what these assets would realise if sold at market value.

    Non-financial assets include both produced and non-produced, non-financial assets.

    Produced non-financial assets include:

    • dwellings
    • other buildings and structures
    • machinery and equipment
    • weapons systems
    • cultivated biological resources
    • transport equipment
    • intellectual property products
    • inventories

    Non-produced non-financial assets:

    • radio spectra
    • cherished or personalised vehicle registration plates

    Financial assets include:

    • means of payment, such as currency
    • financial claims, such as loans
    • economic assets, which are close to financial claims in nature, such as shares
  4. Interpreting the data

    International Financial Reporting Standards

    The International Financial Reporting Standards (IFRS) were introduced from 2005 onwards in the UK. IFRS is the legally required financial reporting framework for the consolidated accounts of EU-listed groups of companies. IFRS differs in some respects from the UK financial reporting standards (UK GAAP).

    The impact on the national balance sheet is difficult to assess as the impact of the transition to IFRS varies by company. Our subsequent work provided little evidence that material differences would occur as a result of the transition. On this basis, the transition to IFRS should not prevent time series analysis of the national balance sheet dataset.

  5. Use of the data

    The national balance sheet estimates are used in private and public sector institutions, the Statistical Office of the European Communities (Eurostat), Bank of England and Her Majesty’s Treasury. The data are used to monitor economic performance, inform monetary and fiscal policy decisions as well as for international comparisons.

  6. Comparability

    The UK produces the national balance sheet to the international standards set out in in the European System of Accounts (ESA 2010).

    Both Eurostat and the Organisation for Economic Co-operation and Development (OECD) hold internationally comparable data for both financial and non-financial balance sheets. When comparing between countries, users should ensure that they are comparing figures in the same currency and that there are no definitional differences noted. This is especially important as different countries adopt ESA10 changes in different years.

    The Wealth and Assets Survey (WAS) is a longitudinal household survey, which gathers information on, among other things, level of savings and debt, saving for retirement, how wealth is distributed among households and factors that affect financial planning. WAS produces estimates of the wealth of the household sector and of property wealth within this sector. The National Balance Sheet (NBS) produces estimates for the households and non-profit institutions serving households (NPISH) sector which includes data on dwellings.

    These estimates are different because:

    • NBS shows data for the UK, whereas WAS only covers Great Britain
    • WAS uses a sample survey of households, whereas NBS uses administrative data sources, for example on house prices
    • the estimate of property prices may be higher in the WAS as the price is based on the perception of the person answering the survey compared with actual selling prices which are used in the NBS estimates
    • WAS includes overseas property owned by GB residents and includes the value of land, whereas NBS only covers dwellings and assets in the UK and does not include estimates for the value of land
    • the WAS includes the estimated value of the contents of houses, such as washing machines, computers, furnishings, etc., whereas this is not included in the NBS
    • the WAS estimates data for informal financial arrangements, such as loans between family members, which are not included in the NBS

    More information on the methods as well as the data for the Wealth and Assets Survey is available on our website.

  7. Data sources

    Data sources for the compilation of the national balance sheet include:

    • administrative data from other government departments and agencies
    • annual reports of public corporations and major businesses
    • industry publications
    • Chartered Institute of Public Finance and Accountancy report on local authority assets

    For central government, data are taken from returns made by government departments to HM Treasury.

    For financial assets and liabilities, data is consistent with the financial balance sheets published for each institutional sector in the 2015 UK National Accounts (The Blue Book).

    Net capital stocks estimates for the produced fixed assets of “ICT equipment”, “other machinery, equipment and weapons systems” and “intellectual property products” are taken directly from the Capital Stocks and Consumption of Fixed Capital dataset due to be published on 1 December 2015.

  8. Revisions

    There are several revisions to the estimates for 2013 due to more up-to-date data being available since the last publication. There are also revisions to the estimates for 1997 to 2013 as a result of implementing methodological changes for estimating capital stocks and consumption of fixed capital. This is detailed above in background note 2 along with the impact of these revisions.

    A full explanation of the national accounts revisions policy (41.6 Kb Pdf) is available on our website.

  9. Future work plan

    There are a number of improvements planned for estimates of capital stocks and the consumption of fixed capital which will have an impact on the National Balance Sheet estimates in future releases. We have included these improvements in our future development plan for non-financial assets and will keep users informed as this work progresses.

    The production of estimates for general, central and local government using a new methodology

    As a consequence of timetable constraints, we have has been unable to fully implement the new methodology to produce estimates using the PIM for the central and local Government sub-sectors. As a result, the sector totals used in the previous publication in 2010 have been maintained and the estimates for 2010 to 2014 have been forecast for these sectors based on historic trends. A main input to the estimates of capital stocks and the consumption of fixed capital are gross fixed capital formation (GFCF) investment estimates which come from sample surveys and administrative sources. This means that any updates to gross fixed capital formation (GFCF) for these sectors are not reflected in this release. All other sectors have been produced using the new methods. Due to other development priorities within our non-financial assets branch, it has not been possible to improve the methods for calculation of these sectors.

    Providing an asset breakdown for institutional sectors

    It is not at present possible to provide and asset breakdown for non-financial corporations, into public non-financial corporations and private non-financial corporations due to the requirement for additional quality assurance of the asset breakdowns.

    Fully introducing new data for non-profit Institutions serving households (NPISH) and public non-financial corporations

    NPISH data from the perpetual inventory model (PIM) were fixed at an early stage of the production process between 1997 and 2012 due to deliveries required to meet the Blue Book 2014 timetable. NPISH estimates have not been re-calculated by the PIM since this time, apart from the year 2013, they have been forecast since. Public non-financial corporations data from the PIM was fixed following the Blue Book 2014 publication and forecast since this time. Therefore these institutional sectors are inconsistent with outputs for other non-government sectors and updates to gross fixed capital formation (GFCF) for these sectors are not reflected in this release.

  10. What do you think?

    We are striving to improve this release and its associated commentary. We would welcome any feedback you may have, and would be particularly interested in knowing how you make use of these data to inform your work. Please contact us via email: gcf@ons.gsi.gov.uk or telephone Stephanie Duff on +44 (0)1633 455250.

    There is a Business and Trade Statistics community on the StatsUserNet website. StatsUserNet is the Royal Statistical Society’s interactive site for users of official statistics. The community objectives are to promote dialogue between users and producers of official business and trade statistics about the structure, content and performance of businesses within the UK. Anyone can join the discussions by registering via either of the links above.

  11. National Statistics

    The UK Statistics Authority has designated these statistics as National Statistics, signifying compliance with the Code of Practice for Official Statistics.

    Designation can be broadly interpreted to mean that the statistics:

    • meet identified user needs
    • are well explained and readily accessible
    • are produced according to sound methods
    • are managed impartially and objectively in the public interest

    Once statistics have been designated as National Statistics it is a statutory requirement that the Code of Practice shall continue to be observed.

  12. Social media

    Follow us on Twitter and receive up to date information about our statistics.

    Like us on Facebook to receive our updates in your newsfeed and to post comments on our page.

  13. Government Statistical Service (GSS) business statistics

    To find out about other official business statistics, and choose the right data for your needs, use the GSS Business Statistics Interactive User Guide. By selecting your topics of interest, the tool will pinpoint publications that should be of interest to you, and provide you with links to more detailed information and the relevant statistical releases. It also offers guidance on which statistics are appropriate for different uses.

  14. Special events

    We have published commentary, analysis and policy on “Special Events” which may affect statistical outputs. For full details visit the Special Events page on our website.

  15. Release policy

    All data in this release can be downloaded free of charge from our website. Here are the instructions to obtain a full time series of data from the statistical bulletin or release pages:

    select “Data in this release”
    select “View datasets associated with this release”
    select the latest release
    select “Select series from this dataset”
    select the reference table of interest
    select “View series”
    select the series of interest (Hint: for a custom download you can use SHIFT to select a range of series or CTRL to select multiple individual series)
    select “View selection”
    select “Download”

  16. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

Back to table of contents

9 . Methodology

Contact details for this Statistical bulletin

Stephanie Duff
gcf@ons.gsi.gov.uk
Telephone: +44 (0)1633 455250