Based on fresh analysis, the average earner in the UK would need 52 years' worth of income to achieve the financial standing of the richest 10% nationwide.
Growing Financial Divide Across Decades
The analysis analyzed financial assets statistics including the 2020-22 timeframe and determined that back in the mid-2000s, it would have needed 38 years' worth of typical employment income to reach the richest segment of the wealth distribution.
A research lead involved with the analysis commented: "Wealth gaps in Britain are currently so significant that a average worker accumulating their complete salary during their working years would remain unable to achieve the peak of the financial hierarchy."
Assessing the Economic Gap
The study revealed that the disparity between the assets of the median citizen and a person belonging to the wealthiest decile was £1 million in the pre-crisis period, but had increased to £1.3 million in real terms by 2020-22.
The researcher added: "These differences are particularly worrying as wealth mobility in Britain is limited – people that start life affluent tend to stay wealthy, and conversely applies."
Relative Wealth Inequality
Although the economic divide growing in specific figures, the portion of total wealth in the UK held by the most affluent homes – called "proportional economic disparity" – has been "largely unchanged since the 1980s," according to the analysis.
Over this timeframe, total wealth in the UK surged from thrice the annual GDP, to almost 7.5 times.
Drivers of Wealth Inequality
So-called "unearned" gains, through increasing property values and variations in retirement fund assessments, were the primary factors of the widening wealth gap since 2010, as stated in the study.
These appreciations generally flowed to older, property-owning households, the study demonstrates – intensifying the age-based economic gap.
Intergenerational Financial Divides
The typical financial disparity between people in their early 30s and people aged 60-64 increased over twofold in inflation-adjusted terms, from £135,000 in 2006-08, to £310,000.
Geographic Differences
There were also stark geographic differences, with the median value of wealth in 2020-22 reaching £290,000 in the southeastern region, where real estate values have typically increased quickly, versus £110k in the north-east.
COVID Era Consequences
Amid the health crisis, when numerous employees were supported by the government-supported job retention program, and health crisis restrictions curtailed consumption options, the statistics indicate countless homes were able to save, growing their net worth.
More affluent homes achieved superior outcomes, however. "The median home in the lowest-income quintile saw their liquid savings increase by just £80 throughout the health crisis (from 2019 to 2022), approximately equivalent to the two years pre-pandemic. On the other hand, the average household in the top income bracket saw their cash reserves increase by £4,200," the report finds.
