Americans and Britons alike are increasingly encouraged to monitor their net worth—the value of their assets minus their debts—to better understand their financial health and progress. While net worth has often been viewed as a measure reserved for the wealthy, financial experts stress its relevance for individuals at all income levels as a practical tool for tracking economic well-being.

Data from the United Kingdom highlights a concerning trend. According to the Office for National Statistics (ONS), the median household net worth, excluding pension savings, declined by approximately 7% in real terms between 2006 and 2022. This decrease occurred despite a significant rise in property prices—an 82% increase during the same period based on Land Registry figures—and a 22% growth in the FTSE 100 stock index. Inflation, which rose roughly 71% according to the retail prices index, has effectively eroded many of the financial gains that households might otherwise have experienced. Adjusted for inflation, median household wealth dropped from near £200,000 in 2006 to about £181,000 by 2022.

Housing remains a central component of household wealth, typically accounting for around 40% of total assets. However, Laurence O’Brien of the Institute for Fiscal Studies noted that real house price growth has largely stalled since 2008, contributing to a decline in housing wealth. He pointed to a reduction in homeownership rates, particularly among younger populations, as a negative development. O’Brien added that while London saw substantial house price increases in the 2010s, many other regions experienced little or no real growth, underscoring regional disparities in housing wealth.

Financial assets such as savings and investments make up a smaller portion of household wealth—about 14% according to ONS data—and have remained broadly flat in recent years. O’Brien attributed this stagnation to sluggish wage growth and economic expansion. He highlighted the role of private pensions, which comprise roughly 35% of household wealth, in supporting long-term financial stability. The introduction of auto-enrolment pension schemes in 2012 has helped increase retirement savings for many.

Financial planning experts emphasize the importance of regularly tracking net worth. Laura Pomfret, co-founder of the app Financielle, described it as a key indicator of financial resilience and progress. She noted that even individuals facing financial challenges can find motivation in seeing incremental improvements, such as reducing credit card debt or increasing pension contributions.

Rebecca Williams of wealth manager Rathbones said that while nominal wages have increased over the past decade and a half, inflation has outpaced those gains, effectively reducing purchasing power. She pointed to rising costs in housing, childcare, and student loan repayments, especially affecting younger families, as barriers to saving. Williams noted that many households rely on dual incomes simply to maintain financial stability, making it more difficult to build wealth.

In this environment, experts agree that monitoring net worth can help individuals gauge their financial trajectory and make informed decisions about saving, investing, and managing debt.