Inheritocracy: The New Wealth Order

The housing ladder used to be something you climbed. Now, it seems more like a lift that only works if your parents press the button. It's no longer about saving diligently for that first deposit—it's about whether your surname comes attached to a lump sum or you have parents that can help you with a deposit. This isn't just middle-class moaning; it's a fundamental restructuring of British society that author Eliza Filby expertly dissects in her thought-provoking new book Inheritocracy, which I have just recently read. I highly recommend you read it and I’m going to highlight some of my learnings in this piece today. 

Filby's thesis is as uncomfortable as it is undeniable: we're witnessing the death of meritocracy and the rise of what she terms "inheritocracy"—a system where life chances are increasingly determined not by talent or effort, but by parental wealth and inheritance. This isn't just about the ultra-wealthy passing down fortunes; it's about how ordinary middle-class families are now essential financial backstops for their adult children, creating a two-tier society of the familially supported and the truly independent.

"I have always believed that I have worked hard but I’ve gradually come to realise that so much of any success I have had has been down to the safety net and the springboard my parents provided. That sounds naive I know but let’s remember we were raised in a 21st century culture where we were told that exams, qualifications, degrees were a pathway to success. But, as more of us became graduates, the price of a degree went up and the value of it went down." Eliza Filby

As someone who's spent years exploring ideas around innovation, education, and strategy, I find her analysis particularly compelling. It challenges our most cherished myths about social mobility and forces us to confront uncomfortable questions about fairness, opportunity, and the future of British society. In this newsletter, I'll unpack five key themes from Inheritocracy that reveal how inherited advantage is reshaping our social landscape, and what it might mean for all of us—whether we stand to inherit, to give or to navigate life without either option.

Not What You Know, But Who Your Parents Are

For generations, we Brits have told ourselves a comforting story: that we've moved beyond the rigid class hierarchies of the past toward a society where talent and hard work determine success. It's a pleasant fiction that's becoming increasingly difficult to maintain. The data simply doesn't support it.

The UK's wealth concentration has reached levels not seen since the Edwardian era. According to the Resolution Foundation, inherited wealth will nearly double from around £125,000 for people born in the 1960s to £210,000 for those born in the 1980s. Meanwhile, the Office for National Statistics reports that the wealthiest 10% of households now hold 43% of all wealth in the UK, while the bottom 50% share just 9%.

This shift represents a fundamental change in our economic structure—from a system where wages and work were the primary path to prosperity, to one where owning capital (particularly property) trumps labour income. As French economist Thomas Piketty argued, when the return on capital exceeds economic growth, inherited wealth inevitably grows more important than earned income.

“When the rate of return on capital exceeds the rate of growth of output and income, as it did in the nineteenth century and seems quite likely to do again in the twenty-first, capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based.” Thomas Piketty

The philosophical dimensions of this shift are profound. John Rawls, in his theory of justice, proposed the thought experiment of the "veil of ignorance"—if we didn't know what position we'd occupy in society, what kind of system would we design? It's unlikely anyone would choose one where the lottery of birth so heavily determines life outcomes. Yet that's increasingly the reality we face.

The rise of inherited wealth cuts against our fundamental British values of fairness and opportunity. It transforms the promise of meritocracy into what political philosopher Michael Sandel calls "hereditary meritocracy"—a system that maintains the appearance of merit-based advancement while actually stunting advantage across generations. As property prices have skyrocketed and wages have stagnated, family wealth has become not just a nice bonus but often a prerequisite for middle-class life.

This isn't just economics—it's reshaping our very conception of citizenship and belonging. When housing, education and security depend increasingly on parental wealth rather than individual contribution, we're not just witnessing income inequality but a fundamental reordering of society's rules.

The Bank of Mum and Dad - The Fifth Largest Mortgage Lender in Britain

If you've attended a British dinner party in the last decade, you've likely heard the phrase "Bank of Mum and Dad" or BOMAD uttered with a mix of resignation and dark humour. What was once an occasional family leg-up has transformed into a structural economic pillar—one that Legal & General values as effectively the UK's fifth-largest mortgage lender, with parents contributing over £8 billion annually to their children's property purchases.

This isn't mere generosity; it's become a necessity. In 1995, a first-time buyer typically needed to save for 3 years to afford a deposit. Today, without parental help, that same buyer would need to save for 19 years in London and around 10 years in most other UK regions. The result? Nearly 40% of first-time buyers now rely on family financial support, creating a housing market effectively closed to those without affluent parents.

But the Bank of Mum and Dad extends far beyond housing. From private education (where fees have risen at twice the rate of inflation) to supporting unpaid internships in competitive industries, to simply subsidising the skyrocketing cost of living, parental financial support has become crucial across middle-class life. Even before the current cost-of-living crisis, research from the Social Market Foundation found that over a quarter of young adults regularly received financial help from their parents for everyday expenses. Anecdotally, I know lots of twenty-somethings and now thirty-somethings who are still profiting from living at home and as a family, we have significantly benefited by having retired parents and aunties who can help with childcare, saving on what would be a considerable cost. 

The psychological impact of this extended financial dependence is profound. It’s what British psychologist Oliver James calls a state of "affluenza"—a painful, contagious, and socially transmitted condition of overload, debt, anxiety and waste resulting from the dogged pursuit of the British dream. For young adults, the resultant emotional cocktail mixes gratitude with resentment, independence with obligation, in ways previous generations simply didn't experience.

“…a contagious middle class virus causing depression, anxiety, addiction and ennui…” Oliver James 

Young adults find themselves in an extended adolescence—financially dependent well into their 30s, delaying traditional markers of adulthood from homeownership to marriage to starting families. One striking statistic from the Office for National Statistics reveals that the average age of first-time mothers in England and Wales has risen to 29.4, up from 26.4 in 1996, with financial security frequently cited as the primary reason for delay.

Meanwhile, parents find themselves as reluctant bankers, often compromising their own retirement plans to support adult children—creating new tensions around expectations, reciprocity, and control. As family wealth becomes less a safety net and more a necessity, the relationship between parent and child transforms in ways that echo pre-modern family structures, where economic interdependence lasts a lifetime.

This shift isn't happening in isolation. It reflects and reinforces broader economic changes that prioritise wealth over work—the financialisation of everyday life that rewards those who already have capital while punishing those who rely solely on their labour. The Bank of Mum and Dad isn't just a cute metaphor; it's a symptom of profound economic restructuring that fundamentally challenges our notions of independence, adulthood and fairness.

The Ladder Is Missing Its Bottom Rungs

"If you work hard, you can achieve anything." This cornerstone of British social mythology is increasingly revealed as exactly that—a myth. The data tells a different story: social mobility in the UK has stalled or even reversed. According to the Social Mobility Commission, only one in eight children from low-income backgrounds will become high-income adults. Adults with lower working-class parents are about three times as likely—30% compared to 11%—to be in a lower working-class occupation themselves, indicating limited upward occupational mobility. Other IFS research indicates that the UK has one of the highest rates of ‘earnings persistence’ among developed countries. This means that a significant portion of earnings inequality is transmitted from parents to children, limiting economic mobility. One study suggests that 45% of earnings inequality is passed from parents to children.

What's particularly insidious is how our supposedly meritocratic institutions actually entrench advantage. Education has long been touted as the great equaliser but the privately educated still dominate our elite universities, with Oxford and Cambridge taking more students from eight top private schools than from 3,000 state schools combined. Even state school success stories often mask hidden advantages—grammar school catchment areas where house prices are inflated by middle-class parents seeking access, or comprehensive schools where extracurricular activities and additional tutoring are only available to those who can afford them.

The psychological concept of the ‘fundamental attribution error’ helps explain why we cling to meritocratic myths despite overwhelming evidence to the contrary. This cognitive bias leads us to overestimate the role of personal qualities (talent, effort, character) and underestimate situational factors (family wealth, connections, structural advantages) in explaining success. The wealthy barrister attributes his position to his brilliance rather than his private education and the unpaid internships his parents funded. The struggling gig economy worker blames her lack of ambition rather than the absence of inherited wealth or family connections. Click the image below to read a cracking article all about FAR - it might be a rabbit hole!

Philosopher Michael Sandel argues that this ‘tyranny of merit’ is particularly cruel because it leads those who succeed to believe they deserve every advantage, while those who struggle are left feeling personally responsible for structural obstacles they cannot overcome. The inheritocracy thus maintains a perfect facade, appearing to reward merit while actually rewarding inherited privilege.

“Ungenerous to the losers and oppressive to the winners, merit becomes a tyrant.” Michael Sandel

British sociologist Diane Reay aptly noted that our educational system has become a mechanism for the reproduction of class inequalities rather than a means of overcoming them. This observation extends beyond education to nearly every institution that claims to allocate opportunity based on merit. From unpaid internships to professional networking to housing assets that determine access to good schools, the system increasingly rewards those who start with advantages rather than those who demonstrate ability. Many of us will have seen this in school with the kids whose parents owned businesses or at university when parents bought a house to ‘rent’ to their children whilst they study. The fact that neither of the young people in these two situations needed to get a part-time job to support themselves whilst studying is often overlooked. Not that I was underprivileged but I got a paper round at 12, a market job at 14 and worked 20+ hours a week during my undergraduate years. I had many friends who didn’t need to work, because the BOMAD covered them. 

The erosion of meritocracy isn't just an economic issue—it's an existential one. When a society promises that hard work and talent will be rewarded, but delivers outcomes determined largely by inheritance, it undermines not just opportunity but the very social contract that holds us together.

Intergenerational and Intragenerational Inequality

The inheritocracy creates two distinct forms of inequality that interlock and reinforce each other. First, there's the much-discussed intergenerational divide between Baby Boomers and younger generations. The statistics are stark: Millennials in their early 30s are only half as likely to own their home as Baby Boomers were at the same age. According to the Institute for Fiscal Studies, median household wealth for those born in the 1980s is about £27,000—roughly half what those born in the 1970s had accumulated at the same age.

This is partly driven by housing—the average UK house price has increased from about 4.5 times the average salary in the 1990s to over 8 times today. For Londoners, it's an eye-watering 14 times. Meanwhile, defined-benefit pensions have all but disappeared for younger workers, replaced by less generous defined-contribution schemes. The secure retirement enjoyed by many Baby Boomers seems an impossible dream for their children and grandchildren.

But perhaps even more significant is the growing intragenerational inequality—the widening gap between those with family wealth and those without within the same age cohort. Two 30-year-olds with similar education and jobs can lead radically different lives based solely on their inheritance prospects. One might own a home thanks to parental support, building equity and security, while the other spends half their income on rent, unable to save for a deposit. By their 40s, these small initial differences compound into entirely different life trajectories.

This creates what sociologist Pierre Bourdieu would recognise as distinct "fields" of social competition—young adults with family wealth essentially playing a different game, with different rules and different stakes, than those without. The inheritocracy thus fractures generational cohorts along new lines of division that often cut across traditional class identities.

The regional dimension adds another layer of complexity. In the UK, the inheritocracy manifests differently across our divided geography. London and the South East see astronomical property values creating paper millionaires, while in former industrial regions like the North East or North West, even inherited homes may hold little equity. The North-South divide then becomes not just about current income but about the wealth transfer potential between generations.

This creates a particularly British paradox—older homeowners in affluent areas have seen their wealth soar through no effort of their own, simply by owning property during decades of rising prices. Meanwhile, young renters work harder for less reward, trapped in a cycle where rent payments prevent saving for deposits, ensuring the cycle continues. The myth that hard work leads to reward has rarely looked more hollow.

The psychological impact of these inequalities is profound. When life chances depend more on parental wealth than personal effort, the resulting sense of injustice corrodes social cohesion. Those without family wealth experience what psychologists call "relative deprivation"—their expectations of fairness clash with observed reality, generating resentment and political alienation. Meanwhile, those with inherited advantages often suffer from what philosopher Jean-Paul Sartre might term "bad faith"—denying the role of privilege in their success to maintain their self-image as deserving.

Reshaping Britain's Psyche

The inheritocracy isn't just reshaping our economy—it's transforming our cultural landscape and collective psychology. As earning power becomes increasingly disconnected from security and status, traditional British values around work, achievement and independence are undergoing subtle but profound shifts.

The Protestant work ethic—that distinctly British belief in hard work as a moral virtue—is being quietly undermined. When inherited wealth trumps earned income, the cultural narrative around "making something of yourself" rings increasingly hollow. Why work yourself to exhaustion for a modest flat when your classmate with wealthy parents glides effortlessly into property ownership? This disconnect between effort and reward creates what sociologist Émile Durkheim would recognise as a state of "anomie"—a breakdown in social norms that leaves individuals without clear guidance for behaviour. I loved teaching Durkheim but I don’t love this seeming inevitability. It makes me sad that we can’t pull ourselves up by our bootstraps it seems.

Young adults without prospective inheritance might feel a sense of permanent precarity, while those expecting eventual family support experience a complex mix of anticipation, obligation, and guilt. Neither group quite embodies the independent, self-determining individual that British culture has traditionally celebrated. If you are ‘waiting for the old folks to die’ (even if it isn’t explicitly mentioned) there is a sense of morbidity and as Filby points out, the challenge of inheritance tax and house sales for elderly care make this evermore complex. (Oh and the ‘not explicitly mentioned’ comment is part of the problem: we don’t talk about inheritance because it is almost the Prodigal Son wishing his father dead. It’s a Catch-22 seemingly.)

Family dynamics are shifting too. The inheritance perspective transforms the parent-child relationship into something more transactional, with complex power dynamics around financial support. Parents find themselves with extended authority over adult children's lives, while adult children navigate a delicate balance between gratitude and resentment. Psychologist Terri Apter's research on "thwarted adulthood" suggests these prolonged dependencies create new tensions around autonomy and identity that previous generations largely avoided.

The inheritocracy reshapes social interaction across class lines. As life experiences diverge between the familially wealthy and those without support, genuine cross-class friendships become rarer. Different housing situations, financial pressures, and inheritance prospects create barriers to mutual understanding that exacerbate Britain's already pronounced class divisions. The inheritocracy isn't just economically divisive—it's socially segregating. We don’t mix with people from different social classes it seems and that doesn’t sit well with me.

Perhaps most profoundly, the inheritocracy is changing our collective understanding of fairness. Traditional British notions of "fair play" have emphasised equality of opportunity rather than outcome. But when the playing field is so obviously tilted by inherited advantage, this conception of fairness begins to break down. Philosopher John Stuart Mill, that quintessentially British thinker, argued that justice requires institutions that promote "the greatest happiness for the greatest number." How can such happiness be achieved when the accident of birth increasingly determines life chances?

Research from the Joseph Rowntree Foundation shows declining belief in social mobility among young Britons—a significant shift in a country where the possibility of "getting on" has long been central to our national self-image. When young people no longer believe that talent and effort will be rewarded, we risk creating what psychologist Martin Seligman termed "learned helplessness"—a condition where people stop trying to improve their circumstances because they believe their actions won't affect outcomes.

Some of you will be familiar with an Edufuturists podcast I recorded with Andy Griffith & Matt Bromley, which unpicked the idea of social capital and the problem with the idea of social mobility. It’s based on their brilliant book, The Working Classroom. It’s another that I would highly recommend and you can give the episode a watch or listen below.

Future Implications and Potential Solutions

If Filby's analysis is correct—and the evidence suggests it is—then the inheritocracy presents a profound challenge to British society and likely one that will echo globally. It undermines our economic efficiency by misallocating opportunity based on birth rather than ability. It threatens our social cohesion by creating parallel lived experiences based on family wealth. And it even challenges our democratic values by concentrating both economic and political power in fewer hands across generations.

So what might be done? The solutions are neither simple nor politically painless, but several approaches merit consideration and Filby suggests many of these without being too politically aligned!

Taxation reform sits at the heart of any serious response. Britain's current inheritance tax system is riddled with loopholes that primarily benefit the wealthy. A more progressive approach might involve lower rates on smaller inheritances while closing exemptions that allow the very wealthy to pass on fortunes largely tax-free. Similarly, property taxation—particularly council tax—remains regressive and based on outdated valuations. A proportional property tax would better reflect current wealth distribution and help fund local services.

Housing market interventions are equally crucial. Expanding truly affordable housing supply, reforming planning laws to enable more building and restricting property speculation could help restore housing's primary function as shelter rather than investment asset. Strengthening renters' rights would also reduce the stark divide between property owners and tenants.

Educational reform presents another avenue (and one which you will not be surprised I would petition hard for!) Reduced university tuition fees would lessen the need for parental support, while increased funding for early years education could help address advantages that begin before school age. Genuine needs-based scholarships—not just token bursaries—at elite universities could open doors currently closed to those without family wealth. Additionally, financial investment in techquity - equitable access to technology for education - is a must and something any government worth its salt will prioritise. Come on Bridget!

While these policy levers exist, the political will to pull them remains questionable. The inheritocracy creates a powerful constituency with vested interests in maintaining the status quo—homeowners who benefit from rising prices, parents who want to pass advantages to their children, politicians who themselves often come from privileged backgrounds. Indeed, as someone set to inherit double parental inheritance, who owns their own home, who is self-employed with its associated tax benefits and living in a growing housing market location, I have a lot to potentially ‘lose’ if there are changes. But I cannot accept that despite this, we should perpetuate the level of inequality that is pervasive in our country. 

The philosophical question at the heart of this challenge is what kind of society we want to build. Do we accept an increasingly hereditary system of advantage or do we recommit to the principle that life chances should depend more on talent and effort than parentage? The answer will shape Britain's social contract for generations to come.

Key Takeaways

1. Recognise the shift. The first step is acknowledging this fundamental change in how opportunity is allocated in modern Britain. Understanding that inherited wealth now often matters more than earned income helps make sense of both personal circumstances and broader social trends.
   
   
2. Mind the wealth gap, not just the income gap. When discussing inequality, we often focus on income disparities. But wealth inequality—especially in housing assets—now drives deeper and more persistent divides. Policy solutions must address wealth concentration, not just income distribution.
   
   
3. Question meritocratic myths. Challenge narratives that attribute success entirely to individual merit. Recognising the role of inherited advantage doesn't diminish genuine achievement, but it does demand more honest conversation about opportunity's uneven distribution.
   
   
4. Re-examine family financial dynamics. For those receiving family support, consider the implicit expectations and power dynamics involved. For those providing it, reflect on the balance between helping children and fostering independence. Open conversations about money remain taboo in many British families but are increasingly necessary.
   
   
5. Look beyond individual solutions. While personal financial literacy and planning matter, the inheritocracy is a structural problem requiring collective responses. Support policy reforms that address wealth inequality rather than simply adapting to it individually.
   
   
6. Build solidarity across the inheritance divide: Those with and without family wealth share an interest in a society where merit matters more than birth. Finding common cause across this divide is essential to building political momentum for change.

The inheritocracy represents a profound challenge to Britain's self-image as a society where anyone can succeed through talent and hard work (however wrong that has been and for how long - need we look at our colonial history?) Filby's analysis forces us to confront uncomfortable truths about how advantage is increasingly inherited rather than earned. But understanding this shift is the first step toward addressing it. The alternative—passively accepting a return to hereditary privilege as the defining feature of British society—would represent a profound failure of both imagination and political will. The choice, ultimately, is ours.

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