Per new study, the typical earner in the UK would have to work 52 years' worth of earnings to attain the wealth level of the wealthiest 10% in the country.
Growing Financial Divide Through the Years
The analysis examined wealth distribution data covering the 2020-22 timeframe and discovered that back in the mid-2000s, it would have taken nearly four decades of average worker salary to enter the richest segment of the economic ladder.
A senior economist associated with the study commented: "Financial divides in Britain are presently so substantial that a typical full-time employee saving all their earnings during their working years would still not be able to achieve the peak of the economic scale."
Assessing the Wealth Divide
The research discovered that the disparity between the assets of the typical individual and a person belonging to the richest segment was one million pounds in the mid-2000s, but had increased to 1.3 million pounds in real terms by the pandemic years.
The analyst added: "These gaps are particularly worrying as economic movement in Britain is limited – those who commence life affluent tend to stay wealthy, and vice versa."
Comparative Financial Divide
Even with the wealth gap growing in absolute terms, the share of total wealth in the UK possessed by the wealthiest families – termed "proportional economic disparity" – has been "broadly stable since the 1980s," per the study.
Over this timeframe, complete net worth in the UK surged from thrice the annual GDP, to approximately 7.5x.
Drivers of Financial Divide
So-called "passive" gains, by means of rising house prices and changes in pension valuations, were the key contributors of the widening wealth gap over the past decade, according to the report.
These appreciations typically went to older, property-owning households, the study demonstrates – worsening the intergenerational wealth divide.
Intergenerational Wealth Disparities
The median economic difference between people in their early 30s and those in their early 60s grew by more than 100% in real terms, from 135 thousand pounds in the mid-2000s, to £310k.
Geographic Variations
There were also pronounced area-based disparities, with the average level of wealth in the pandemic period amounting to £290k in the SE of England, where property prices have typically increased quickly, versus £110k in the northeastern region.
Health Crisis Years Consequences
During the pandemic, when numerous employees were supported by the public-funded employment protection, and health crisis restrictions limited opportunities for spending, the information reveals numerous families were in a position to set aside money, growing their net worth.
Higher-income households fared much better, though. "The median home in the lowest-income quintile saw their liquid savings rise by merely £80 throughout the health crisis (from 2019 to 2022), roughly identical to the two years pre-pandemic. Conversely, the typical family in the top income bracket saw their cash reserves grow by 4,200 pounds," the report finds.
