Per fresh analysis, the average employee in the UK would need 52 years' worth of earnings to reach the wealth level of the richest 10% of the population.
Widening Financial Divide Across Decades
This research reviewed wealth distribution information covering the 2020-22 timeframe and discovered that during 2006-08, it would have taken nearly four decades of typical employment income to join the wealthiest decile of the economic ladder.
A senior economist associated with the analysis observed: "Wealth gaps in Britain are presently so substantial that a regular employee accumulating their complete salary during their working years would continue to be incapable to attain the highest level of the financial hierarchy."
Measuring the Economic Gap
The analysis found that the disparity between the assets of the typical individual and someone in the top 10% was £1m in the pre-crisis period, but had increased to £1.3 million in inflation-adjusted terms by the pandemic years.
The analyst further stated: "These disparities are particularly worrying as wealth mobility in Britain is restricted – individuals who begin life affluent tend to remain affluent, and conversely applies."
Comparative Financial Divide
Even with the financial disparity growing in actual numbers, the percentage of total wealth in the UK owned by the wealthiest families – known as "comparative financial divide" – has been "broadly stable since the 1980s," per the analysis.
During this period, complete net worth in the UK increased dramatically from triple the annual GDP, to nearly seven and a half times.
Factors of Financial Divide
So-called "passive" increases, via rising house prices and adjustments to retirement fund assessments, were the main drivers of the growing financial disparity since 2010, as stated in the study.
These appreciations generally flowed to elderly homeowners, the analysis reveals – worsening the age-based economic gap.
Intergenerational Wealth Disparities
The typical financial disparity between thirty-somethings and people aged 60-64 grew by more than 100% in inflation-adjusted terms, from 135 thousand pounds in pre-financial crisis, to £310k.
Area-Based Disparities
Furthermore, the study revealed significant area-based disparities, with the median value of net worth in 2020-22 standing at £290k in south-east England, where property prices have tended to rise rapidly, as opposed to 110 thousand pounds in the NE of England.
Health Crisis Years Consequences
Amid the health crisis, when numerous employees were covered under the public-funded employment protection, and health crisis restrictions reduced expenditure possibilities, the data shows many households were capable of accumulating, growing their net worth.
Wealthier families performed significantly better, though. "The average household in the bottom income bracket saw their liquid savings rise by merely £80 during the COVID years (from 2019 to 2022), broadly the same as the 24 months before COVID. In contrast, the average household in the wealthiest fifth saw their liquid savings grow by 4,200 pounds," the report finds.
