Based on fresh analysis, the average earner in the UK would need 52 years' worth of salary to reach the net worth of the richest 10% of the population.
Widening Financial Divide Over Time
The analysis reviewed net worth data including the recent health crisis years and discovered that during the pre-financial crisis era, it would have needed nearly four decades of average worker salary to join the top 10th of the wealth distribution.
A senior economist involved with the analysis stated: "Financial divides in Britain are now so large that a average worker setting aside their entire income across their entire working life would remain unable to attain the highest level of the financial hierarchy."
Assessing the Financial Disparity
The analysis revealed that the difference between the wealth of the typical individual and an individual in the wealthiest decile was £1 million in the mid-2000s, but had expanded to £1.3m in inflation-adjusted terms by 2020-22.
The researcher added: "These differences are doubly concerning as financial progression in Britain is low – those who commence life wealthy tend to stay wealthy, and vice versa."
Proportional Economic Disparity
Even with the wealth gap growing in actual numbers, the share of complete net worth in the UK held by the most affluent homes – termed "proportional economic disparity" – has been "largely unchanged since the eighties," according to the analysis.
Throughout these years, total wealth in the UK surged from triple the yearly economic output, to approximately 7.5x.
Drivers of Financial Divide
So-called "automatic" gains, via increasing property values and variations in pension valuations, were the primary factors of the expanding economic divide over the past decade, according to the study.
These gains tended to accrue to elderly homeowners, the research shows – worsening the intergenerational wealth divide.
Generational Financial Divides
The average wealth gap between thirty-somethings and people aged 60-64 grew by more than 100% in inflation-adjusted terms, from £135k in the mid-2000s, to £310,000.
Geographic Differences
Furthermore, the study revealed pronounced geographic differences, with the typical amount of wealth in the pandemic period amounting to £290k in the southeastern region, where property prices have generally grown substantially, compared with £110,000 in the NE of England.
Health Crisis Years Effects
Amid the health crisis, when countless laborers were covered under the public-funded employment protection, and health crisis restrictions curtailed consumption options, the data shows many households were capable of accumulating, enhancing their financial standing.
Wealthier families achieved superior outcomes, nevertheless. "The average household in the lowest-income quintile saw their cash reserves grow by only eighty pounds throughout the health crisis (from 2019 to 2022), broadly the same as the pre-crisis period. In contrast, the median home in the top income bracket saw their cash reserves rise by £4,200," the report finds.
