Based on recent study, the average earner in the UK would require 52 years' worth of salary to reach the net worth of the most affluent 10% of the population.
Expanding Financial Divide Over Time
The study reviewed wealth distribution data including the Covid pandemic period and determined that during the mid-2000s, it would have required nearly four decades of median full-time earnings to reach the richest segment of the wealth distribution.
A senior economist involved with the analysis commented: "Economic disparities in Britain are now so large that a regular employee saving all their earnings throughout their career would remain unable to reach the top of the economic scale."
Measuring the Economic Gap
The research found that the gap between the net worth of the typical individual and someone in the richest segment was one million pounds in the mid-2000s, but had increased to £1.3 million in real terms by 2020-22.
The economist added: "These disparities are particularly worrying as wealth mobility in Britain is limited – individuals who begin life affluent tend to continue being rich, and the opposite holds true."
Proportional Economic Disparity
Although the wealth gap growing in absolute terms, the share of complete net worth in the UK owned by the most affluent homes – termed "relative wealth inequality" – has been "mostly consistent since the 1980s," per the study.
During this period, complete net worth in the UK rose substantially from triple the yearly economic output, to almost 7.5 times.
Drivers of Economic Disparity
Termed "passive" increases, through growing real estate costs and variations in retirement fund assessments, were the key contributors of the widening wealth gap over the past decade, according to the report.
These increases generally flowed to senior citizens with real estate, the research shows – intensifying the age-based economic gap.
Generational Financial Divides
The median economic difference between people in their early 30s and people aged 60-64 more than doubled in actual value, from £135k in 2006-08, to 310 thousand pounds.
Area-Based Disparities
There were also stark area-based disparities, with the average level of assets in 2020-22 reaching £290k in the southeastern region, where property prices have generally grown substantially, as opposed to £110k in the north-east.
Pandemic Period Consequences
Amid the health crisis, when millions of workers were protected by the public-funded employment protection, and Covid shutdowns limited opportunities for spending, the statistics indicate numerous families were in a position to set aside money, growing their net worth.
Wealthier families performed significantly better, nevertheless. "The median home in the poorest fifth saw their liquid savings increase by just £80 throughout the health crisis (from 2019 to 2022), roughly identical to the two years pre-pandemic. On the other hand, the typical family in the wealthiest fifth saw their available funds grow by 4,200 pounds," the report finds.
