You asked
It strikes me that the calculation of the wealth of the British public needs to take into account:
The unfunded pension liabilities
The value of infrastructure that is freely available
The value of the social housing occupied by a person as against its market value; if I have a permanent tenancy in such a residence at less than market rate, I am the beneficiary of the difference in value, and so in some sense the owner
The below market rents paid by many tenants
The existence of the NHS as a free medical service
I would like to know if or how these are estimated?
We said
Thank you for your query regarding wealth distribution statistics, in particular the treatment of 1) pensions, 2) infrastructure, 3) social housing, 4) below market rents, and 5) the NHS.
The primary source of statistics on the distribution of wealth and inequality in GB is the Wealth & Assets Survey (WAS). WAS is a longitudinal survey which samples from all private households (excluding people in residential institutions and homeless people) in Great Britain. The survey is designed to provide estimates of household wealth, broken down into 4 categories: property, physical, financial and pension wealth. Several of your points, e.g. estimates of the value of infrastructure relate to the estimation of national wealth as a whole rather than the wealth of GB households. This concept of national wealth is better measured by National Accounts estimates (https://www.ons.gov.uk/economy/grossdomesticproductgdp/compendium/unitedkingdomnationalaccountsthebluebook/2016edition).
For pensions (1), the statistics produced from the Wealth and Assets survey capture the wealth in both funded and unfunded private pensions. From a household/individual point of view, which is the focus of WAS, there is no difference between how their pension entitlements are funded. Estimates of this pension wealth are broken down into those in the accumulation (currently contributing to a pension/no longer contributing but not yet in receipt of the pension) and decumulation ('pensioner') phases. Respondents may report pensions from public and/or private sector periods of employment.
The only 'pension' which the survey does not aim to cover is the state pension - and associated second state pension (S2P/SERPS). It is arguably not appropriate to include the state pension as part of the assets of households. It is reflected in household income statistics, both in terms of the tax and National Insurance paid whilst individuals are working, and the income received after individuals are in receipt of the state pension. See for example, the Effects of Taxes & Benefits on Household Income, 2014/15 (http://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/theeffectsoftaxesandbenefitsonhouseholdincome/previousReleases)
Infrastructure owned by the state (2), is not considered to be part of household wealth, and, along with collective services such as policing and national defence, no estimate of the in-kind benefit that households obtain from them are included in official income distribution statistics. The nature of these collective benefits in kind makes it impossible to quantify the benefit they yield to individual households and therefore impossible to assess their redistributional effect.
With respect to social housing (3), only households who own/part own property are treated as having property wealth. Housing subsidies are instead treated as an in-kind income from the state, received by households, in ONS's Effects of Taxes & Benefits on Household Income statistics. The total housing subsidy includes the contribution from central government to the housing revenue accounts of local authorities, and grants paid to Scottish Homes, the Northern Ireland Housing Executive (NIHE), housing associations and registered social landlords. Within Greater London, the rest of England, Wales, Scotland and Northern Ireland each tenant of the aforementioned bodies is allocated a share of the region's total relevant subsidy based on the council tax band of the dwelling and the weighted average (by type of property) property price within each country or region. Housing subsidy does not include rent rebates and allowances or local tax rebates. Cash benefits such as housing benefit are of course also reflected in households' gross income in official income statistics.
For individuals paying below market rents (4), with a private landlord charging less than the going market value, the individuals who live there will benefit from this and will in-turn have a higher wealth (due to paying lower rent) which offsets the drop in the owner’s wealth from them not maximising their income. Additionally, the impact of below market rents can also be seen in the UK's EU-Statistics on Income & Living Conditions (http://ec.europa.eu/eurostat/web/microdata/european-union-statistics-on-income-and-living-conditions), which includes an estimate of the imputed rental income that owner occupiers and those renting at below market value rates will receive.
The assets of the NHS (5) are considered part of government rather than household wealth. However, the benefits that households receive due to the existence of the NHS are treated as in-kind income received from the state in ONS's Effects of Taxes & Benefits on Household Income statistics mentioned above.
For further information on the concepts used in household income and wealth distribution statistics, there is an OECD publication, setting out international guidelines, that may be of interest: http://www.oecd.org/statistics/302013041e.pdf
If you have any further questions, please get in contact with ONS's Household Assets team on the following email address: wealth.and.assets.survey@ons.gov.uk