Per new analysis, the typical earner in the UK would have to work over five decades of salary to reach the financial standing of the richest 10% of the population.
Widening Wealth Gap Across Decades
The analysis analyzed wealth distribution statistics from the 2020-22 timeframe and discovered that back in the mid-2000s, it would have needed 38 years' worth of average worker salary to reach the top 10th of the economic ladder.
An economic expert part of the study commented: "Economic disparities in Britain are now so large that a average worker saving all their earnings during their working years would still not be able to achieve the peak of the economic scale."
Assessing the Wealth Divide
The research discovered that the gap between the wealth of the average person and an individual in the wealthiest decile was £1m in the pre-crisis period, but had widened to £1.3 million in actual value by recent times.
The economist further stated: "These gaps are especially alarming as financial progression in Britain is low – people that start life wealthy tend to stay wealthy, and conversely applies."
Comparative Financial Divide
Despite the economic divide growing in actual numbers, the portion of complete net worth in the UK possessed by the richest households – known as "proportional economic disparity" – has been "largely unchanged since the 1980s," per the study.
During this period, complete net worth in the UK surged from triple the annual GDP, to nearly seven and a half times.
Factors of Wealth Inequality
Termed "unearned" appreciation, through growing real estate costs and adjustments to superannuation evaluations, were the main drivers of the widening wealth gap from 2010 onward, as stated in the analysis.
These increases typically went to older, property-owning households, the analysis reveals – intensifying the generational financial disparity.
Intergenerational Financial Divides
The average wealth gap between people in their early 30s and those in their early 60s increased over twofold in inflation-adjusted terms, from £135,000 in pre-financial crisis, to £310k.
Regional Variations
Additionally, there were significant geographic differences, with the average level of net worth in 2020-22 reaching £290,000 in the SE of England, where housing costs have generally grown substantially, versus £110,000 in the northeastern region.
Pandemic Period Consequences
During the pandemic, when millions of workers were supported by the taxpayer-backed furlough scheme, and health crisis restrictions curtailed consumption options, the statistics indicate many households were in a position to set aside money, growing their net worth.
More affluent homes achieved superior outcomes, though. "The average household in the bottom income bracket saw their liquid savings increase by just £80 throughout the health crisis (from 2019 to 2022), roughly identical to the pre-crisis period. In contrast, the median home in the highest income quintile saw their liquid savings grow by 4,200 pounds," the analysis concludes.
