According to recent analysis, the typical worker in the UK would require over five decades of salary to reach the net worth of the wealthiest 10% of the population.
Expanding Financial Divide Over Time
This research reviewed net worth data including the Covid pandemic period and determined that back in the pre-financial crisis era, it would have required 38 years' worth of average worker salary to reach the top 10th of the wealth distribution.
An economic expert associated with the report stated: "Financial divides in Britain are currently so significant that a average worker setting aside their entire income throughout their career would still not be able to achieve the peak of the financial hierarchy."
Quantifying the Wealth Divide
The study found that the difference between the assets of the typical individual and an individual in the richest segment was one million pounds in the mid-2000s, but had increased to £1.3 million in actual value by the pandemic years.
The researcher added: "These gaps are especially alarming as economic movement in Britain is low – people that start life affluent tend to remain affluent, and conversely applies."
Proportional Economic Disparity
Although the wealth gap expanding in specific figures, the portion of overall assets in the UK held by the wealthiest families – known as "proportional economic disparity" – has been "broadly stable since the 1980s era," according to the research.
Over this timeframe, total wealth in the UK rose substantially from thrice the annual GDP, to approximately 7.5x.
Factors of Financial Divide
Termed "unearned" gains, through increasing property values and variations in pension valuations, were the key contributors of the widening wealth gap from 2010 onward, as stated in the report.
These gains generally flowed to older, property-owning households, the analysis reveals – worsening the age-based economic gap.
Age-Based Wealth Disparities
The average wealth gap between people in their early 30s and sixty-somethings increased over twofold in inflation-adjusted terms, from 135 thousand pounds in 2006-08, to £310k.
Area-Based Disparities
There were also stark regional variations, with the median value of assets in 2020-22 amounting to £290k in south-east England, where real estate values have generally grown substantially, as opposed to £110,000 in the NE of England.
Pandemic Period Impact
Throughout the COVID period, when countless laborers were covered under the public-funded employment protection, and pandemic lockdowns reduced expenditure possibilities, the information reveals numerous families were capable of accumulating, increasing their wealth.
More affluent homes fared much better, though. "The median home in the poorest fifth saw their cash reserves increase by just £80 during the COVID years (from 2019 to 2022), approximately equivalent to the two years pre-pandemic. On the other hand, the median home in the highest income quintile saw their cash reserves grow by 4,200 pounds," the analysis concludes.
