According to recent research, the average worker in the UK would need half a century of earnings to reach the net worth of the richest 10% of the population.
Expanding Wealth Gap Over Time
This research reviewed financial assets information covering the 2020-22 timeframe and found that in 2006-08, it would have taken 38 years of typical employment income to join the wealthiest decile of the financial hierarchy.
An economic expert associated with the analysis commented: "Financial divides in Britain are presently so substantial that a average worker saving all their earnings throughout their career would still not be able to attain the highest level of the economic scale."
Quantifying the Wealth Divide
The study discovered that the difference between the wealth of the average person and someone in the richest segment was £1m in 2006-08, but had expanded to £1.3 million in real terms by recent times.
The analyst further stated: "These differences are particularly worrying as financial progression in Britain is restricted – individuals who begin life wealthy tend to remain affluent, and the opposite holds true."
Relative Wealth Inequality
Even with the economic divide growing in absolute terms, the share of total wealth in the UK owned by the wealthiest families – termed "relative wealth inequality" – has been "broadly stable since the 1980s," according to the study.
During this period, overall assets in the UK increased dramatically from thrice the yearly economic output, to nearly seven and a half times.
Drivers of Financial Divide
Termed "passive" gains, through increasing property values and adjustments to pension valuations, were the key contributors of the growing financial disparity since 2010, according to the report.
These gains tended to accrue to senior citizens with real estate, the research shows – intensifying the age-based economic gap.
Intergenerational Economic Gaps
The median economic difference between individuals aged 30-34 and sixty-somethings grew by more than 100% in actual value, from 135 thousand pounds in pre-financial crisis, to 310 thousand pounds.
Area-Based Differences
There were also pronounced geographic differences, with the median value of assets in recent years amounting to £290k in south-east England, where real estate values have generally grown substantially, compared with £110,000 in the NE of England.
COVID Era Consequences
During the pandemic, when numerous employees were supported by the taxpayer-backed furlough scheme, and Covid shutdowns limited opportunities for spending, the statistics indicate numerous families were able to save, enhancing their financial standing.
More affluent homes achieved superior outcomes, though. "The average household in the poorest fifth saw their available funds rise by merely £80 throughout the health crisis (2019-20 to 2021-22), roughly identical to the two years pre-pandemic. On the other hand, the average household in the top income bracket saw their available funds rise by £4,200," the study reveals.
