Based on new analysis, the median employee in the UK would have to work over five decades of salary to attain the net worth of the wealthiest 10% in the country.
Widening Economic Disparity Across Decades
The study reviewed net worth information including the 2020-22 timeframe and determined that in 2006-08, it would have needed 38 years of average worker salary to join the wealthiest decile of the wealth distribution.
An economic expert involved with the analysis stated: "Economic disparities in Britain are currently so significant that a average worker setting aside their entire income during their working years would still not be able to attain the highest level of the wealth ladder."
Measuring the Economic Gap
The analysis revealed that the gap between the wealth of the average person and an individual in the wealthiest decile was £1m in the mid-2000s, but had expanded to £1.3m in inflation-adjusted terms by the pandemic years.
The researcher further stated: "These disparities are especially alarming as financial progression in Britain is limited – individuals who begin life wealthy tend to stay wealthy, and the opposite holds true."
Comparative Financial Divide
Although the wealth gap expanding in absolute terms, the percentage of overall assets in the UK held by the most affluent homes – known as "proportional economic disparity" – has been "largely unchanged since the 1980s era," according to the analysis.
Throughout these years, total wealth in the UK rose substantially from triple the gross domestic product, to approximately 7.5x.
Drivers of Economic Disparity
Termed "passive" gains, by means of growing real estate costs and adjustments to pension valuations, were the key contributors of the expanding economic divide over the past decade, according to the analysis.
These appreciations typically went to senior citizens with real estate, the research shows – intensifying the intergenerational wealth divide.
Age-Based Economic Gaps
The typical financial disparity between people in their early 30s and those in their early 60s more than doubled in real terms, from £135,000 in pre-financial crisis, to £310k.
Regional Variations
There were also stark geographic differences, with the median value of assets in the pandemic period standing at £290,000 in south-east England, where property prices have tended to rise rapidly, compared with £110k in the northeastern region.
Health Crisis Years Consequences
During the pandemic, when numerous employees were covered under the government-supported job retention program, and health crisis restrictions limited opportunities for spending, the statistics indicate numerous families were capable of accumulating, growing their net worth.
Wealthier families achieved superior outcomes, however. "The average household in the poorest fifth saw their cash reserves rise by merely £80 over the pandemic period (from 2019 to 2022), broadly the same as the two years pre-pandemic. In contrast, the average household in the wealthiest fifth saw their liquid savings increase by £4,200," the study reveals.
