According to fresh research, the median employee in the UK would require 52 years' worth of salary to achieve the wealth level of the most affluent 10% in the country.
Growing Wealth Gap Over Time
The analysis examined net worth statistics covering the Covid pandemic period and determined that in 2006-08, it would have needed nearly four decades of average worker salary to enter the top 10th of the wealth distribution.
A senior economist part of the study stated: "Wealth gaps in Britain are now so large that a average worker saving all their earnings throughout their career would still not be able to attain the highest level of the wealth ladder."
Assessing the Wealth Divide
The research found that the disparity between the wealth of the median citizen and someone in the richest segment was £1 million in 2006-08, but had increased to 1.3 million pounds in actual value by 2020-22.
The economist added: "These differences are particularly worrying as economic movement in Britain is limited – people that start life wealthy tend to stay wealthy, and the opposite holds true."
Comparative Financial Divide
Despite the wealth gap widening in absolute terms, the percentage of overall assets in the UK held by the most affluent homes – known as "comparative financial divide" – has been "mostly consistent since the 1980s era," as stated in the study.
Over this timeframe, complete net worth in the UK increased dramatically from three times the yearly economic output, to almost 7.5 times.
Contributors of Wealth Inequality
So-called "automatic" appreciation, by means of increasing property values and variations in pension valuations, were the primary factors of the growing financial disparity from 2010 onward, as stated in the study.
These appreciations typically went to older, property-owning households, the analysis reveals – exacerbating the intergenerational wealth divide.
Generational Economic Gaps
The median economic difference between thirty-somethings and people aged 60-64 grew by more than 100% in actual value, from 135 thousand pounds in the mid-2000s, to £310k.
Geographic Variations
There were also pronounced area-based disparities, with the median value of wealth in 2020-22 reaching 290 thousand pounds in south-east England, where real estate values have generally grown substantially, versus £110,000 in the northeastern region.
COVID Era Consequences
Throughout the COVID period, when countless laborers were supported by the taxpayer-backed furlough scheme, and Covid shutdowns curtailed consumption options, the data shows many households were able to save, growing their net worth.
Higher-income households achieved superior outcomes, though. "The typical family in the lowest-income quintile saw their liquid savings grow by only eighty pounds throughout the health crisis (from 2019 to 2022), approximately equivalent to the pre-crisis period. In contrast, the median home in the highest income quintile saw their cash reserves increase by £4,200," the report finds.
