Per fresh analysis, the average employee in the UK would have to work half a century of earnings to attain the net worth of the wealthiest 10% in the country.
Widening Wealth Gap Across Decades
This research examined wealth distribution data including the recent health crisis years and found that back in 2006-08, it would have taken nearly four decades of median full-time earnings to reach the top 10th of the economic ladder.
A research lead associated with the study stated: "Financial divides in Britain are now so large that a average worker accumulating their complete salary throughout their career would still not be able to attain the highest level of the financial hierarchy."
Assessing the Economic Gap
The analysis found that the difference between the net worth of the typical individual and a person belonging to the wealthiest decile was £1 million in 2006-08, but had expanded to £1.3 million in real terms by recent times.
The analyst added: "These gaps are doubly concerning as financial progression in Britain is restricted – individuals who begin life well-off tend to continue being rich, and the opposite holds true."
Comparative Financial Divide
Even with the economic divide expanding in absolute terms, the portion of overall assets in the UK possessed by the wealthiest families – called "proportional economic disparity" – has been "largely unchanged since the 1980s era," according to the study.
Throughout these years, total wealth in the UK rose substantially from triple the yearly economic output, to nearly seven and a half times.
Drivers of Economic Disparity
So-called "unearned" increases, via growing real estate costs and adjustments to pension valuations, were the key contributors of the growing financial disparity over the past decade, according to the analysis.
These gains generally flowed to senior citizens with real estate, the analysis reveals – exacerbating the intergenerational wealth divide.
Age-Based Wealth Disparities
The average wealth gap between individuals aged 30-34 and people aged 60-64 more than doubled in inflation-adjusted terms, from £135k in pre-financial crisis, to 310 thousand pounds.
Geographic Disparities
There were also significant area-based disparities, with the average level of net worth in recent years reaching 290 thousand pounds in south-east England, where property prices have typically increased quickly, as opposed to 110 thousand pounds in the NE of England.
COVID Era Consequences
During the pandemic, when millions of workers were protected by the government-supported job retention program, and health crisis restrictions limited opportunities for spending, the data shows countless homes were in a position to set aside money, increasing their wealth.
Higher-income households fared much better, however. "The average household in the poorest fifth saw their cash reserves grow by only eighty pounds over the pandemic period (from 2019 to 2022), roughly identical to the pre-crisis period. On the other hand, the median home in the top income bracket saw their liquid savings grow by 4,200 pounds," the study reveals.
