Based on new analysis, the typical worker in the UK would have to work 52 years' worth of earnings to reach the wealth level of the wealthiest 10% of the population.
Growing Wealth Gap Over Time
This research reviewed wealth distribution information including the recent health crisis years and determined that during 2006-08, it would have taken nearly four decades of typical employment income to join the top 10th of the financial hierarchy.
A senior economist associated with the report commented: "Economic disparities in Britain are presently so substantial that a average worker setting aside their entire income across their entire working life would remain unable to reach the top of the wealth ladder."
Quantifying the Financial Disparity
The research found that the difference between the net worth of the average person and someone in the top 10% was £1 million in the mid-2000s, but had widened to £1.3 million in inflation-adjusted terms by 2020-22.
The researcher added: "These differences are especially alarming as financial progression in Britain is limited – people that start life well-off tend to remain affluent, and vice versa."
Comparative Financial Divide
Even with the wealth gap widening in absolute terms, the portion of complete net worth in the UK owned by the wealthiest families – called "comparative financial divide" – has been "largely unchanged since the eighties," as stated in the analysis.
Over this timeframe, overall assets in the UK surged from thrice the yearly economic output, to nearly seven and a half times.
Contributors of Economic Disparity
So-called "passive" increases, through rising house prices and changes in superannuation evaluations, were the main drivers of the widening wealth gap from 2010 onward, per the analysis.
These gains generally flowed to older, property-owning households, the study demonstrates – worsening the age-based economic gap.
Intergenerational Financial Divides
The average wealth gap between people in their early 30s and people aged 60-64 grew by more than 100% in inflation-adjusted terms, from 135 thousand pounds in pre-financial crisis, to £310,000.
Geographic Differences
Furthermore, the study revealed significant area-based disparities, with the median value of assets in 2020-22 amounting to £290,000 in the southeastern region, where property prices have generally grown substantially, compared with £110k in the northeastern region.
COVID Era Impact
Throughout the COVID period, when millions of workers were covered under the government-supported job retention program, and pandemic lockdowns curtailed consumption options, the data shows countless homes were capable of accumulating, growing their net worth.
Wealthier families achieved superior outcomes, though. "The median home in the bottom income bracket saw their available funds increase by just £80 throughout the health crisis (across the pandemic timeframe), roughly identical to the pre-crisis period. Conversely, the average household in the wealthiest fifth saw their liquid savings increase by £4,200," the analysis concludes.
