🔗 Share this article

Per new study, the typical employee in the UK would need over five decades of income to achieve the net worth of the most affluent 10% of the population.

Growing Wealth Gap Across Decades

The study examined wealth distribution statistics covering the recent health crisis years and found that in 2006-08, it would have required 38 years of average worker salary to enter the top 10th of the wealth distribution.

A research lead involved with the report commented: "Financial divides in Britain are now so large that a regular employee saving all their earnings across their entire working life would continue to be incapable to attain the highest level of the wealth ladder."

Quantifying the Wealth Divide

The study revealed that the difference between the wealth of the typical individual and an individual in the richest segment was one million pounds in the pre-crisis period, but had widened to £1.3 million in real terms by recent times.

The economist added: "These disparities are particularly worrying as economic movement in Britain is low – individuals who begin life wealthy tend to continue being rich, and the opposite holds true."

Relative Wealth Inequality

Even with the economic divide growing in specific figures, the percentage of total wealth in the UK owned by the wealthiest families – termed "comparative financial divide" – has been "broadly stable since the 1980s era," per the research.

Throughout these years, total wealth in the UK rose substantially from thrice the gross domestic product, to almost 7.5 times.

Drivers of Wealth Inequality

So-called "passive" increases, via increasing property values and changes in pension valuations, were the key contributors of the growing financial disparity since 2010, per the analysis.

These gains tended to accrue to senior citizens with real estate, the research shows – intensifying the generational financial disparity.

Age-Based Wealth Disparities

The average wealth gap between people in their early 30s and those in their early 60s grew by more than 100% in actual value, from £135,000 in the mid-2000s, to 310 thousand pounds.

Area-Based Variations

Additionally, there were significant regional variations, with the average level of assets in 2020-22 reaching £290k in south-east England, where property prices have tended to rise rapidly, versus 110 thousand pounds in the NE of England.

Health Crisis Years Impact

Throughout the COVID period, when countless laborers were protected by the taxpayer-backed furlough scheme, and Covid shutdowns curtailed consumption options, the data shows countless homes were in a position to set aside money, enhancing their financial standing.

Wealthier families achieved superior outcomes, however. "The median home in the poorest fifth saw their cash reserves increase by just £80 during the COVID years (2019-20 to 2021-22), roughly identical to the 24 months before COVID. On the other hand, the average household in the top income bracket saw their liquid savings grow by 4,200 pounds," the analysis concludes.