According to recent research, the median worker in the UK would have to work 52 years' worth of earnings to attain the wealth level of the wealthiest 10% of the population.
Widening Wealth Gap Across Decades
The analysis analyzed net worth data including the 2020-22 timeframe and determined that in the pre-financial crisis era, it would have needed 38 years of median full-time earnings to enter the richest segment of the financial hierarchy.
A research lead involved with the analysis observed: "Financial divides in Britain are presently so substantial that a typical full-time employee saving all their earnings during their working years would still not be able to reach the top of the financial hierarchy."
Assessing the Economic Gap
The analysis found that the difference between the wealth of the median citizen and someone in the top 10% was £1m in 2006-08, but had widened to £1.3m in inflation-adjusted terms by recent times.
The researcher continued: "These differences are especially alarming 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
Even with the wealth gap growing in specific figures, the share of total wealth in the UK owned by the most affluent homes – called "comparative financial divide" – has been "largely unchanged since the 1980s era," as stated in the research.
Throughout these years, complete net worth in the UK surged from three times the gross domestic product, to almost 7.5 times.
Factors of Economic Disparity
So-called "unearned" increases, by means of increasing property values and variations in pension valuations, were the main drivers of the expanding economic divide from 2010 onward, per the analysis.
These gains generally flowed to senior citizens with real estate, the research shows – intensifying the generational financial disparity.
Age-Based Economic Gaps
The average wealth gap between people in their early 30s and those in their early 60s grew by more than 100% in inflation-adjusted terms, from 135 thousand pounds in pre-financial crisis, to £310,000.
Geographic Variations
Furthermore, the study revealed significant area-based disparities, with the typical amount of assets in 2020-22 reaching £290,000 in the SE of England, where real estate values have generally grown substantially, versus £110,000 in the north-east.
COVID Era Consequences
Throughout the COVID period, when millions of workers were covered under the government-supported job retention program, and health crisis restrictions limited opportunities for spending, the statistics indicate countless homes were in a position to set aside money, increasing their wealth.
Higher-income households fared much better, however. "The average household in the lowest-income quintile saw their cash reserves grow by only eighty pounds throughout the health crisis (across the pandemic timeframe), approximately equivalent to the pre-crisis period. On the other hand, the median home in the wealthiest fifth saw their liquid savings increase by £4,200," the report finds.
