Per recent research, the average worker in the UK would need over five decades of income to attain the wealth level of the most affluent 10% in the country.
Growing Economic Disparity Across Decades
The analysis examined net worth data covering the Covid pandemic period and discovered that during 2006-08, it would have required 38 years' worth of typical employment income to enter the top 10th of the financial hierarchy.
A research lead part of the analysis commented: "Economic disparities in Britain are now so large that a typical full-time employee accumulating their complete salary during their working years would continue to be incapable to reach the top of the economic scale."
Assessing the Wealth Divide
The analysis found that the disparity between the wealth of the typical individual and someone in the top 10% was £1 million in 2006-08, but had expanded to £1.3 million in real terms by the pandemic years.
The researcher continued: "These gaps are doubly concerning as financial progression in Britain is low – individuals who begin life wealthy tend to stay wealthy, and vice versa."
Relative Wealth Inequality
Even with the economic divide expanding in actual numbers, the percentage of total wealth in the UK owned by the wealthiest families – termed "proportional economic disparity" – has been "mostly consistent since the eighties," per the analysis.
During this period, complete net worth in the UK rose substantially from thrice the annual GDP, to almost 7.5 times.
Factors of Economic Disparity
So-called "unearned" increases, through rising house prices and changes in retirement fund assessments, were the primary factors of the widening wealth gap from 2010 onward, as stated in the analysis.
These appreciations typically went to senior citizens with real estate, the analysis reveals – exacerbating the age-based economic gap.
Generational Wealth Disparities
The average wealth gap between individuals aged 30-34 and sixty-somethings more than doubled in inflation-adjusted terms, from 135 thousand pounds in the mid-2000s, to 310 thousand pounds.
Regional Differences
Additionally, there were significant geographic differences, with the median value of wealth in recent years amounting to £290,000 in the SE of England, where property prices have tended to rise rapidly, versus 110 thousand pounds in the NE of England.
COVID Era Impact
Amid the health crisis, when millions of workers were protected by the public-funded employment protection, and health crisis restrictions reduced expenditure possibilities, the data shows many households were capable of accumulating, enhancing their financial standing.
Higher-income households performed significantly better, though. "The average household in the bottom income bracket saw their cash reserves grow by only eighty pounds during the COVID years (from 2019 to 2022), broadly the same as the pre-crisis period. In contrast, the average household in the highest income quintile saw their cash reserves grow by 4,200 pounds," the report finds.
