Based on recent analysis, the typical worker in the UK would have to work 52 years' worth of salary to attain the wealth level of the richest 10% of the population.
Expanding Wealth Gap Over Time
The analysis analyzed net worth data including the recent health crisis years and found that back in 2006-08, it would have required 38 years' worth of average worker salary to join the richest segment of the wealth distribution.
A research lead associated with the analysis stated: "Economic disparities in Britain are presently so substantial that a regular employee setting aside their entire income across their entire working life would continue to be incapable to reach the top of the wealth ladder."
Assessing the Wealth Divide
The analysis revealed that the disparity between the wealth of the typical individual and an individual in the top 10% was £1 million in the pre-crisis period, but had expanded to 1.3 million pounds in real terms by 2020-22.
The analyst further stated: "These disparities are doubly concerning as financial progression in Britain is limited – individuals who begin life well-off tend to remain affluent, and vice versa."
Comparative Financial Divide
Although the economic divide expanding in absolute terms, the portion of overall assets in the UK held by the richest households – called "relative wealth inequality" – has been "mostly consistent since the eighties," as stated in the analysis.
During this period, overall assets in the UK increased dramatically from thrice the gross domestic product, to almost 7.5 times.
Contributors of Economic Disparity
Termed "unearned" gains, by means of increasing property values and variations in pension valuations, were the key contributors of the growing financial disparity since 2010, per the study.
These increases generally flowed to older, property-owning households, the study demonstrates – exacerbating the age-based economic gap.
Intergenerational Financial Divides
The average wealth gap between individuals aged 30-34 and sixty-somethings increased over twofold in real terms, from £135,000 in pre-financial crisis, to £310k.
Area-Based Differences
Additionally, there were significant area-based disparities, with the median value of wealth in 2020-22 standing at 290 thousand pounds in south-east England, where real estate values have typically increased quickly, compared with £110,000 in the NE of England.
Health Crisis Years Effects
Amid the health crisis, when millions of workers were protected by the taxpayer-backed furlough scheme, and health crisis restrictions reduced expenditure possibilities, the data shows countless homes were capable of accumulating, enhancing their financial standing.
More affluent homes performed significantly better, nevertheless. "The typical family in the poorest fifth saw their cash reserves increase by just £80 over the pandemic period (from 2019 to 2022), approximately equivalent to the 24 months before COVID. In contrast, the average household in the wealthiest fifth saw their cash reserves increase by £4,200," the analysis concludes.
