Per recent analysis, the typical earner in the UK would have to work 52 years' worth of salary to reach the net worth of the most affluent 10% of the population.
Expanding Wealth Gap Over Time
The analysis examined net worth information including the Covid pandemic period and discovered that back in 2006-08, it would have taken nearly four decades of average worker salary to join the wealthiest decile of the wealth distribution.
A senior economist associated with the analysis commented: "Economic disparities in Britain are currently so significant that a regular employee accumulating their complete salary across their entire working life would remain unable to reach the top of the economic scale."
Quantifying the Economic Gap
The analysis found that the gap between the net worth of the average person and a person belonging to the top 10% was £1 million in the pre-crisis period, but had widened to 1.3 million pounds in actual value by the pandemic years.
The researcher added: "These differences are doubly concerning as financial progression in Britain is restricted – those who commence life well-off tend to continue being rich, and vice versa."
Comparative Financial Divide
Despite the economic divide expanding in absolute terms, the share of total wealth in the UK possessed by the most affluent homes – called "relative wealth inequality" – has been "largely unchanged since the eighties," according to the study.
During this period, total wealth in the UK surged from three times the annual GDP, to almost 7.5 times.
Drivers of Financial Divide
Referred to as "unearned" gains, via growing real estate costs and changes in superannuation evaluations, were the primary factors of the expanding economic divide since 2010, per the analysis.
These appreciations typically went to older, property-owning households, the research shows – worsening the generational financial disparity.
Age-Based Financial Divides
The average wealth gap between individuals aged 30-34 and those in their early 60s increased over twofold in inflation-adjusted terms, from 135 thousand pounds in the mid-2000s, to £310,000.
Regional Disparities
Additionally, there were pronounced regional variations, with the typical amount of assets in the pandemic period standing at £290k in south-east England, where real estate values have generally grown substantially, versus £110,000 in the north-east.
COVID Era Consequences
Amid the health crisis, when millions of workers were covered under the government-supported job retention program, and pandemic lockdowns curtailed consumption options, the statistics indicate countless homes were able to save, enhancing their financial standing.
Higher-income households performed significantly better, though. "The median home in the lowest-income quintile saw their available funds grow by only eighty pounds during the COVID years (2019-20 to 2021-22), broadly the same as the 24 months before COVID. On the other hand, the average household in the wealthiest fifth saw their cash reserves rise by £4,200," the report finds.
