Based on fresh study, the average earner in the UK would have to work half a century of income to attain the net worth of the richest 10% in the country.
Expanding Wealth Gap Across Decades
The study examined financial assets statistics including the 2020-22 timeframe and discovered that back in 2006-08, it would have required 38 years' worth of typical employment income to reach the wealthiest decile of the financial hierarchy.
A research lead associated with the analysis stated: "Financial divides in Britain are presently so substantial that a regular employee setting aside their entire income across their entire working life would remain unable to reach the top of the financial hierarchy."
Measuring the Financial Disparity
The research revealed that the difference between the net worth of the average person and an individual in the top 10% was £1 million in the pre-crisis period, but had expanded to 1.3 million pounds in inflation-adjusted terms by recent times.
The analyst continued: "These gaps are doubly concerning as economic movement in Britain is limited – people that start life well-off tend to stay wealthy, and vice versa."
Comparative Financial Divide
Despite the economic divide growing in absolute terms, the portion of overall assets in the UK owned by the wealthiest families – termed "relative wealth inequality" – has been "broadly stable since the 1980s," per the research.
Over this timeframe, complete net worth in the UK increased dramatically from three times the annual GDP, to approximately 7.5x.
Contributors of Wealth Inequality
So-called "automatic" appreciation, via rising house prices and changes in pension valuations, were the main drivers of the growing financial disparity from 2010 onward, per the report.
These increases generally flowed to elderly homeowners, the analysis reveals – exacerbating the generational financial disparity.
Age-Based Economic Gaps
The typical financial disparity between people in their early 30s and sixty-somethings increased over twofold in inflation-adjusted terms, from 135 thousand pounds in 2006-08, to £310,000.
Geographic Variations
There were also pronounced regional variations, with the average level of wealth in recent years reaching 290 thousand pounds in south-east England, where housing costs have tended to rise rapidly, as opposed to £110k in the north-east.
Pandemic Period Consequences
Throughout the COVID period, when millions of workers were protected by the public-funded employment protection, and health crisis restrictions limited opportunities for spending, the data shows countless homes were capable of accumulating, growing their net worth.
More affluent homes fared much better, however. "The typical family in the poorest fifth saw their liquid savings rise by merely £80 during the COVID years (from 2019 to 2022), approximately equivalent to the two years pre-pandemic. In contrast, the typical family in the top income bracket saw their cash reserves grow by 4,200 pounds," the report finds.
