🔗 Share this article

According to recent analysis, the average worker in the UK would require 52 years' worth of earnings to reach the net worth of the richest 10% nationwide.

Widening Wealth Gap Over Time

The study analyzed financial assets data covering the recent health crisis years and determined that back in the mid-2000s, it would have needed 38 years of average worker salary to reach the wealthiest decile of the financial hierarchy.

A senior economist associated with the study observed: "Wealth gaps in Britain are presently so substantial that a regular employee setting aside their entire income throughout their career would still not be able to reach the top of the financial hierarchy."

Measuring the Wealth Divide

The study revealed that the gap between the wealth of the typical individual and a person belonging to the richest segment was £1m in 2006-08, but had increased to 1.3 million pounds in inflation-adjusted terms by the pandemic years.

The economist continued: "These differences are doubly concerning as wealth mobility in Britain is low – people that start life wealthy tend to stay wealthy, and vice versa."

Relative Wealth Inequality

Although the financial disparity widening in specific figures, the portion of overall assets in the UK held by the richest households – known as "comparative financial divide" – has been "mostly consistent since the 1980s," according to the research.

Over this timeframe, total wealth in the UK increased dramatically from three times the annual GDP, to approximately 7.5x.

Contributors of Economic Disparity

Termed "unearned" appreciation, through rising house prices and variations in superannuation evaluations, were the key contributors of the widening wealth gap over the past decade, per the analysis.

These increases generally flowed to senior citizens with real estate, the research shows – worsening the age-based economic gap.

Intergenerational Financial Divides

The median economic difference between thirty-somethings and people aged 60-64 increased over twofold in actual value, from £135,000 in 2006-08, to £310k.

Area-Based Disparities

Furthermore, the study revealed significant regional variations, with the median value of net worth in 2020-22 standing at £290k in the SE of England, where housing costs have tended to rise rapidly, versus 110 thousand pounds in the northeastern region.

Health Crisis Years Impact

During the pandemic, when countless laborers were protected by the taxpayer-backed furlough scheme, and Covid shutdowns limited opportunities for spending, the data shows many households were able to save, growing their net worth.

More affluent homes achieved superior outcomes, nevertheless. "The typical family in the lowest-income quintile saw their cash reserves grow by only eighty pounds during the COVID years (across the pandemic timeframe), approximately equivalent to the pre-crisis period. In contrast, the average household in the wealthiest fifth saw their liquid savings increase by £4,200," the report finds.