British Indians have emerged as one of the UK’s strongest wealth success stories over the past decade, bucking a wider trend of stagnation and decline among many other ethnic groups, according to new research from the London School of Economics.
The report, The Ethnic Wealth Divide in the UK by Dr Eleni Karagiannaki, tracks changes in household wealth between 2012–14 and 2021–23. It finds that people from the Indian ethnic group were among those who recorded the largest gains in wealth during this period, placing British Indians at the forefront of asset growth in modern Britain.
Median household wealth rose sharply for Indian and White British groups, while remaining close to zero for Bangladeshi, Black African and Black Caribbean households. In contrast, the Pakistani group experienced a fall in median wealth, highlighting widening inequalities between ethnic communities.
UK-born Indians pull further ahead
British Indians born in the UK were found to be particularly well positioned. The study notes that UK-born Indians “have a clear wealth advantage”, outperforming both non-UK-born Indians and White British individuals, a reflection of earlier access to stable employment, income progression and asset ownership.
Property and investment ownership have played a key role in this divergence. Indian households were already among those with higher ownership levels a decade ago, alongside White British and “Asian Other” groups. By 2021–23, ownership had increased further for these communities, while Bangladeshi, Black Caribbean and Pakistani groups saw sharp declines, especially in home ownership.
Income stability underpins asset growth
Overall, household wealth growth for Indian and other Asian groups ranked among the strongest across all ethnic categories studied. The report also shows that Indian and White British individuals were more likely to move up from the lowest wealth quartile, while Pakistani and Black African individuals faced a higher risk of falling from the top.
Underlying these trends are long-term income patterns. “Indian and White British groups typically experience steadier income growth across the life-course, enabling earlier asset accumulation,” the report said, while Pakistani and Bangladeshi groups face some of the widest income gaps relative to White British households.
Commenting on the overall gap of wealth between communities, Professor Jonathan Portes, Professor of Economics and Public Policy at King’s College London, said, “Wealth inequality in the UK (as in most countries) is considerably greater than income inequality; so it’s not surprising that wealth disparities between (and within) ethnic groups are greater than income disparities.
“Analysing changes in disparities by ethnicity, however, is complicated by the fact that most (if by no means all) ethnic minorities in the UK are first and second generation migrants, and have therefore had less time and opportunity to accumulate wealth, especially housing, than most of those from a white background.
“And indeed the LSE analysis does suggest that inequalities in housing are very important, suggesting that this is a key driver of the disadvantage of some ethnic groups, probably reflecting both patterns of settlement- location and housing tenure and labour market disadvantage. Addressing this requires policies that promote mobility: educational, social and geographical.”
Non-dom reforms trigger investor uncertainty
However, economists warn that policy instability risks undermining future wealth creation if it continues to unsettle long-term investors. The government’s recent handling of tax and investor policy has drawn growing criticism for a pattern of abrupt changes followed by rapid reversals, raising questions about strategic coherence and economic credibility.
Whitehall is now in talks with senior City figures as Labour seeks to repair the fallout from scrapping the non-domiciled tax regime. Chancellor Rachel Reeves replaced the system in the 2024 Autumn Budget with a residence-based model taxing long-term residents on their worldwide income, before introducing a four-year “grace period” after backlash. The Treasury is already reviewing the policy, amid concerns it accelerated the departure of wealthy individuals and entrepreneurs.
U-turns raise concerns over economic direction
Several high-profile figures, including Lakshmi Mittal and tech entrepreneur Herman Narula, are reported to have left the UK. In response, ministers are considering further adjustments, including a possible extension of the grace period and proposals for a “pay-to-play” investor visa. The Department for Business and Trade has also launched a “global talent taskforce” as ministers talk up ambitions to build a $1tn UK company.
Pressure groups, emboldened by recent Treasury U-turns on inheritance tax for farmers and business rates, are pushing for a broader retreat. Proposals include a “global investor visa” charging £200,000 a year and requiring £2.5m of investment, while offering generous tax exemptions. Critics argue the approach exposes a deeper problem: expensive policies launched without sufficient foresight, then partially unwound at significant cost. Wealth is built on predictability, not policy zigzags and repeated reversals risk eroding confidence in Britain’s long-term economic direction.
For Britain’s Indian community, the findings underline a decade of financial consolidation, but also highlight how fragile future wealth creation may become without long-term, predictable policy making.
