Wealth disparity in Spain continues to widen, with the young becoming poorer and older Spaniards and retirees enjoying higher levels of wealth than before. This is according to findings from the Survey of Household Finances report by the Banco de España.

In headline terms, the report reveals that the average net wealth in Spain in 2022 stood at €309,000 and the median net wealth €142,700.

This translates to average growth of 3.7 percent compared with 2020 levels, but median wealth rose by just 0.5 percent in that period. This represents slower growth than during the 2017-2020 period (4.8 percent and 6.8 percent respectively).

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However, the most striking aspect of the report was the growing disparity between older and younger Spaniards.

Dubbed the ‘generation gap’ by sections of the Spanish press, this wealth disparity has widened over the last five years, rewarding pensioners and leaving the under 40s, the only group to lose wealth overall between 2017 to 2022, increasingly behind when it comes to both net and median wealth, but also asset ownership.

But some groups in Spain saw significant increases in wealth. “Median wealth increased substantially in households in the top two deciles of the income distribution (11.4 percent and 12.5 percent, respectively), in older households (19 percent), in those where the head of the family has a university education and across the net wealth distribution,” the report stated.

The younger generations, however, didn’t do so well. Those between 20 and 40 years of age have gone from a median net wealth of €96,700 in 2020 to €86,100 in 2022.

On the other hand, Spaniards between 60 and 80 – a high percentage of whom are pensioners – saw the most notable rise in average wealth, with a net increase of €51,600.

As for the rest of the age brackets, those under 20 years of age had the lowest wealth levels overall. Median wealth went from €45,900 in 2020 to €38,800, a loss of €7,100.

Though the report did highlight the connection between educational levels and higher average income, it also pinpointed asset ownership as a major driver of wealth disparity.

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According to the report, wealth in Spain remains concentrated in ‘real assets’, accounting for 78.9 percent of total assets. Of these, property is by far the most significant, accounting for 52.9 percent of the value of real assets for all households and 41.7 percent of the value of total assets at the end of 2022.

Clearly, with rising property and rental prices around Spain and high youth unemployment rates, it is increasingly difficult for younger Spaniards (meaning up to age 40) to get on the property ladder and become asset holders.

Overall, average wealth levels fell in younger households (defined as under 45 years of age), households headed by self-employed people, households headed by people without a university education, and households that do not own their own home.

This comes in stark contrast to older and retired Spaniards who not only receive pensions, but are largely homeowners, have been for some time, and likely bought their properties some time ago when they were far cheaper as a proportion of income.

The report’s findings come amid ongoing concerns about the medium to long-term demographic future of Spain. This is particularly centred on the public pensions system, with worries that the an ageing population and flatlining birth rates, combined with the imminent retirement of the baby boomer generation, means that Spain could need millions of foreign workers to prop up its pensions system in the coming decades.

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