Based on fresh analysis, the median earner in the UK would have to work half a century of earnings to achieve the wealth level of the richest 10% of the population.
Widening Financial Divide Across Decades
The study reviewed net worth data from the recent health crisis years and found that in 2006-08, it would have required 38 years' worth of median full-time earnings to enter the wealthiest decile of the wealth distribution.
A senior economist involved with the analysis stated: "Wealth gaps in Britain are presently so substantial 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."
Measuring the Economic Gap
The research discovered that the disparity between the net worth of the average person and someone in the top 10% was one million pounds in the mid-2000s, but had widened to £1.3 million in inflation-adjusted terms by the pandemic years.
The economist added: "These gaps are particularly worrying as financial progression in Britain is limited – those who commence life affluent tend to continue being rich, and vice versa."
Relative Wealth Inequality
Despite the economic divide growing in actual numbers, the share of total wealth in the UK held by the most affluent homes – termed "proportional economic disparity" – has been "largely unchanged since the 1980s era," as stated in the research.
During this period, total wealth in the UK rose substantially from three times the gross domestic product, to nearly seven and a half times.
Drivers of Wealth Inequality
So-called "passive" increases, via rising house prices and variations in superannuation evaluations, were the main drivers of the widening wealth gap from 2010 onward, as stated in the analysis.
These gains generally flowed to older, property-owning households, the analysis reveals – worsening the age-based economic gap.
Age-Based Financial Divides
The average wealth gap between individuals aged 30-34 and people aged 60-64 increased over twofold in real terms, from £135k in 2006-08, to 310 thousand pounds.
Area-Based Variations
Furthermore, the study revealed significant regional variations, with the median value of wealth in 2020-22 amounting to 290 thousand pounds in the southeastern region, where property prices have tended to rise rapidly, compared with £110k in the north-east.
Health Crisis Years Effects
Throughout the COVID period, when millions of workers were supported by the taxpayer-backed furlough scheme, and Covid shutdowns reduced expenditure possibilities, the information reveals numerous families were capable of accumulating, increasing their wealth.
Wealthier families achieved superior outcomes, though. "The typical family in the lowest-income quintile saw their cash reserves grow by only eighty pounds over the pandemic period (from 2019 to 2022), broadly the same as the 24 months before COVID. In contrast, the typical family in the wealthiest fifth saw their available funds grow by 4,200 pounds," the report finds.
