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Middle Australia’s wealth is going backwards while the richest claim an ever-greater share of the pile, according to new research that shows more than 25,000 people across the country became millionaires last year.

The latest global wealth report from the Swiss bank UBS said 2025 marked “an extraordinary year”, in which close to a million new millionaires were created worldwide – a record increase in a single year.

While hailing the rapid rise in personal riches, the report also warned that the “gains were uneven”.

“While average wealth rose notably, median wealth actually declined in most markets, highlighting a growing divide between the wealthiest and the broader population,” it said.

The median delivers a better insight of “typical” wealth levels at the middle of the scale, while the average can be distorted by the distribution of outcomes – such as a small group of very wealthy individuals.

This effect was evident in Australia, where UBS calculated that average personal net wealth climbed by 19% so far this decade – even after accounting for high and persistent inflation over that time between 2020 and 2025.

But this masked a nearly 7% contraction in the median wealth of Australian adults over the period, suggesting expanding wealth has favoured those at the top.

Australia is not alone.

Through the past six years, median wealth is lower in 18 of the 29 countries analysed by UBS, including a roughly 20% decline in Germany, the US and the UK.

In contrast, median wealth in the 2020s has jumped by 50% in Japan, 20% in India; and more than 10% in South Korea.

Saul Eslake, an independent economist, said “Australia hasn’t experienced as much widening in income inequality as quite a lot of other similar countries, but we have had big increases in wealth inequality”.

“The biggest driver of inequality by wealth is housing,” Eslake said.

Property wealth and compulsory superannuation helped Australian adults have the third-highest median net wealth in the world, at nearly $US211,000 (A$306,000), behind Luxembourg and Belgium.

While the US had the second-highest average level of wealth behind Switzerland, it was ranked 28th of 30 countries by the median measure.

Eslake said it was “contested territory” whether high and rising inequality was technically bad for economies.

But he said there was a growing consensus among major international bodies, such as the IMF and the OECD, that “beyond some point widening inequality detracts from economic growth”.

“One of the arguments is that wealthy people save more and so don’t add to growth. Another is that populist policies, which are almost always bad for economic growth, are in part a reaction to widening inequality.”

While Australia’s progressive income tax and transfer system helps flatten income inequality, Eslake argued “our tax system does very little at all to ameliorate the market forces driving increased inequality in the distribution of wealth”.

Eslake said this was one reason why he was one of “a handful” of economists calling for an inheritance tax.

He said the case for such a tax was particularly compelling given that “when you consider about $5.5tn dollars of wealth will be passed from boomers to their kids over the next 25-30 years, and most of those ‘kids’ will be in their 50s and 60s when they get it”.

“I don’t think it’s at all unreasonable that some of that is taxed on estates of $5m or $10m, with exemptions for surviving spouses or partners. If instead of stamp duty [on property transactions] we had a broadly based land tax, that would do some of it as well.”