Based on recent study, the average worker in the UK would have to work 52 years' worth of salary to reach the financial standing of the wealthiest 10% in the country.
Expanding Financial Divide Over Time
The analysis reviewed wealth distribution statistics including the 2020-22 timeframe and found that in the mid-2000s, it would have taken nearly four decades of typical employment income to reach the richest segment of the financial hierarchy.
A research lead part of the report observed: "Financial divides in Britain are currently so significant that a typical full-time employee setting aside their entire income during their working years would still not be able to attain the highest level of the financial hierarchy."
Quantifying the Economic Gap
The analysis found that the disparity between the assets of the average person and a person belonging to the top 10% was one million pounds in 2006-08, but had increased to £1.3 million in inflation-adjusted terms by 2020-22.
The economist continued: "These gaps are especially alarming as financial progression in Britain is limited – individuals who begin life affluent tend to remain affluent, and vice versa."
Relative Wealth Inequality
Even with the economic divide expanding in actual numbers, the share of complete net worth in the UK held by the richest households – known as "relative wealth inequality" – has been "mostly consistent since the eighties," according to the analysis.
Throughout these years, total wealth in the UK surged from three times the gross domestic product, to almost 7.5 times.
Drivers of Wealth Inequality
So-called "passive" appreciation, through growing real estate costs and changes in superannuation evaluations, were the main drivers of the expanding economic divide from 2010 onward, per the report.
These increases typically went to older, property-owning households, the analysis reveals – worsening the intergenerational wealth divide.
Intergenerational Financial Divides
The average wealth gap between people in their early 30s and those in their early 60s increased over twofold in actual value, from 135 thousand pounds in 2006-08, to 310 thousand pounds.
Geographic Differences
Additionally, there were pronounced geographic differences, with the median value of assets in the pandemic period reaching £290,000 in the southeastern region, where housing costs have tended to rise rapidly, versus £110,000 in the north-east.
Health Crisis Years Consequences
During the pandemic, when millions of workers were protected by the taxpayer-backed furlough scheme, and Covid shutdowns curtailed consumption options, the statistics indicate many households were capable of accumulating, increasing their wealth.
More affluent homes fared much better, however. "The typical family in the lowest-income quintile saw their cash reserves increase by just £80 throughout the health crisis (2019-20 to 2021-22), approximately equivalent to the two years pre-pandemic. On the other hand, the median home in the highest income quintile saw their available funds rise by £4,200," the report finds.
