According to new research, the median earner in the UK would have to work 52 years' worth of income to reach the wealth level of the wealthiest 10% nationwide.
Expanding Financial Divide Across Decades
The study analyzed wealth distribution data covering the 2020-22 timeframe and discovered that during the mid-2000s, it would have required 38 years of average worker salary to reach the top 10th of the wealth distribution.
An economic expert involved with the analysis commented: "Financial divides in Britain are presently so substantial that a regular employee accumulating their complete salary throughout their career would remain unable to attain the highest level of the economic scale."
Measuring the Wealth Divide
The study revealed that the difference between the assets of the median citizen and a person belonging to the wealthiest decile was £1 million in 2006-08, but had widened to £1.3 million in real terms by recent times.
The researcher added: "These differences are particularly worrying as financial progression in Britain is limited – those who commence life affluent tend to stay wealthy, and conversely applies."
Relative Wealth Inequality
Although the economic divide widening in absolute terms, the percentage of total wealth in the UK held by the most affluent homes – known as "proportional economic disparity" – has been "largely unchanged since the 1980s," as stated in the study.
Throughout these years, complete net worth in the UK surged from thrice the yearly economic output, to almost 7.5 times.
Contributors of Wealth Inequality
Referred to as "passive" increases, by means of increasing property values and variations in superannuation evaluations, were the main drivers of the growing financial disparity since 2010, according to the report.
These gains generally flowed to older, property-owning households, the research shows – intensifying the intergenerational wealth divide.
Age-Based Wealth Disparities
The typical financial disparity between people in their early 30s and people aged 60-64 increased over twofold in actual value, from 135 thousand pounds in 2006-08, to £310,000.
Geographic Variations
Furthermore, the study revealed pronounced geographic differences, with the average level of assets in recent years amounting to £290k in the southeastern region, where housing costs have generally grown substantially, as opposed to £110,000 in the north-east.
Health Crisis Years Impact
Throughout the COVID period, when millions of workers were covered under the taxpayer-backed furlough scheme, and health crisis restrictions curtailed consumption options, the data shows many households were able to save, enhancing their financial standing.
Wealthier families performed significantly better, however. "The median home in the poorest fifth saw their cash reserves grow by only eighty pounds throughout the health crisis (from 2019 to 2022), broadly the same as the two years pre-pandemic. Conversely, the average household in the wealthiest fifth saw their liquid savings rise by £4,200," the report finds.
