Per new study, the median worker in the UK would have to work over five decades of income to reach the wealth level of the richest 10% in the country.
Expanding Economic Disparity Across Decades
The analysis analyzed net worth information including the recent health crisis years and found that back in the pre-financial crisis era, it would have required 38 years of average worker salary to join the top 10th of the wealth distribution.
A research lead part of the study observed: "Economic disparities in Britain are now so large that a typical full-time employee accumulating their complete salary across their entire working life would still not be able to reach the top of the economic scale."
Assessing the Economic Gap
The research found that the disparity between the net worth of the typical individual and an individual in the wealthiest decile was £1m in 2006-08, but had widened to 1.3 million pounds in actual value by recent times.
The researcher further stated: "These disparities are particularly worrying as wealth mobility in Britain is limited – those who commence life well-off tend to stay wealthy, and the opposite holds true."
Comparative Financial Divide
Although the financial disparity expanding in specific figures, the share of overall assets in the UK held by the wealthiest families – termed "comparative financial divide" – has been "broadly stable since the 1980s era," per the analysis.
During this period, overall assets in the UK surged from triple the gross domestic product, to almost 7.5 times.
Contributors of Wealth Inequality
So-called "automatic" appreciation, via growing real estate costs and variations in pension valuations, were the main drivers of the growing financial disparity since 2010, per the analysis.
These appreciations generally flowed to older, property-owning households, the research shows – exacerbating the generational financial disparity.
Age-Based Economic Gaps
The average wealth gap between individuals aged 30-34 and people aged 60-64 grew by more than 100% in actual value, from 135 thousand pounds in pre-financial crisis, to 310 thousand pounds.
Area-Based Differences
Additionally, there were significant regional variations, with the median value of wealth in recent years standing at 290 thousand pounds in the southeastern region, where property prices have tended to rise rapidly, versus £110k in the north-east.
COVID Era Consequences
Throughout the COVID period, when millions of workers were supported by the taxpayer-backed furlough scheme, and pandemic lockdowns limited opportunities for spending, the data shows many households were able to save, increasing their wealth.
Wealthier families performed significantly better, though. "The average household in the poorest fifth saw their cash reserves increase by just £80 throughout the health crisis (from 2019 to 2022), broadly the same as the 24 months before COVID. On the other hand, the average household in the top income bracket saw their available funds rise by £4,200," the report finds.
