According to new study, the average employee in the UK would have to work 52 years' worth of income to attain the wealth level of the wealthiest 10% in the country.
Widening Wealth Gap Across Decades
This research analyzed financial assets data including the 2020-22 timeframe and determined that back in the pre-financial crisis era, it would have taken nearly four decades of average worker salary to enter the richest segment of the economic ladder.
An economic expert part of the analysis stated: "Economic disparities in Britain are currently so significant that a average worker setting aside their entire income during their working years would still not be able to reach the top of the economic scale."
Quantifying the Financial Disparity
The study found that the disparity between the wealth of the median citizen and an individual in the richest segment was one million pounds in 2006-08, but had widened to £1.3m in real terms by recent times.
The economist further stated: "These gaps are particularly worrying as wealth mobility in Britain is limited – those who commence life wealthy tend to remain affluent, and the opposite holds true."
Relative Wealth Inequality
Despite the wealth gap expanding in specific figures, the share of overall assets in the UK owned by the most affluent homes – termed "proportional economic disparity" – has been "mostly consistent since the 1980s era," according to the analysis.
During this period, complete net worth in the UK rose substantially from three times the annual GDP, to approximately 7.5x.
Drivers of Economic Disparity
So-called "automatic" increases, through growing real estate costs and adjustments to pension valuations, were the main drivers of the expanding economic divide from 2010 onward, according to the analysis.
These gains tended to accrue to older, property-owning households, the analysis reveals – worsening the generational financial disparity.
Age-Based Wealth Disparities
The average wealth gap between people in their early 30s and sixty-somethings grew by more than 100% in inflation-adjusted terms, from £135k in the mid-2000s, to £310k.
Regional Differences
Additionally, there were pronounced geographic differences, with the average level of wealth in recent years reaching £290,000 in south-east England, where property prices have generally grown substantially, compared with 110 thousand pounds in the northeastern region.
Pandemic Period Consequences
Throughout the COVID period, when numerous employees were protected by the public-funded employment protection, and health crisis restrictions limited opportunities for spending, the data shows countless homes were able to save, increasing their wealth.
Higher-income households performed significantly better, though. "The typical family in the bottom income bracket saw their liquid savings rise by merely £80 during the COVID years (across the pandemic timeframe), approximately equivalent to the 24 months before COVID. Conversely, the average household in the top income bracket saw their liquid savings rise by £4,200," the report finds.
