Based on new research, the typical worker in the UK would need 52 years' worth of salary to attain the wealth level of the richest 10% nationwide.
Expanding Wealth Gap Over Time
This research analyzed net worth statistics covering the 2020-22 timeframe and found that back in the mid-2000s, it would have taken 38 years' worth of average worker salary to join the top 10th of the financial hierarchy.
An economic expert involved with the report stated: "Wealth gaps in Britain are currently so significant that a regular employee saving all their earnings throughout their career would remain unable to reach the top of the financial hierarchy."
Quantifying the Economic Gap
The analysis discovered that the gap between the assets of the average person and an individual in the top 10% was £1m in the pre-crisis period, but had expanded to £1.3m in actual value by recent times.
The analyst continued: "These differences are particularly worrying as wealth mobility in Britain is restricted – individuals who begin life wealthy tend to continue being rich, and vice versa."
Comparative Financial Divide
Even with the wealth gap expanding in absolute terms, the share of complete net worth in the UK held by the wealthiest families – termed "relative wealth inequality" – has been "mostly consistent since the 1980s," per the study.
During this period, overall assets in the UK increased dramatically from three times the yearly economic output, to approximately 7.5x.
Drivers of Financial Divide
Referred to as "automatic" increases, through growing real estate costs and changes in retirement fund assessments, were the primary factors of the growing financial disparity since 2010, as stated in the analysis.
These increases tended to accrue to elderly homeowners, the research shows – intensifying the intergenerational wealth divide.
Intergenerational Wealth Disparities
The typical financial disparity between people in their early 30s and sixty-somethings increased over twofold in real terms, from £135k in the mid-2000s, to £310,000.
Area-Based Disparities
There were also pronounced area-based disparities, with the median value of wealth in recent years amounting to 290 thousand pounds in the SE of England, where property prices have tended to rise rapidly, compared with £110,000 in the north-east.
Health Crisis Years Impact
During the pandemic, when numerous employees were protected by the public-funded employment protection, and health crisis restrictions curtailed consumption options, the information reveals countless homes were in a position to set aside money, increasing their wealth.
Wealthier families achieved superior outcomes, however. "The average household in the poorest fifth saw their cash reserves grow by only eighty pounds during the COVID years (from 2019 to 2022), roughly identical to the 24 months before COVID. Conversely, the median home in the highest income quintile saw their liquid savings rise by £4,200," the analysis concludes.
