Per fresh analysis, the typical earner in the UK would require over five decades of income to achieve the net worth of the most affluent 10% in the country.
Growing Wealth Gap Across Decades
The analysis examined net worth statistics including the Covid pandemic period and found that in the mid-2000s, it would have required nearly four decades of average worker salary to reach the richest segment of the economic ladder.
A senior economist involved with the analysis observed: "Economic disparities in Britain are now so large that a average worker setting aside their entire income across their entire working life would continue to be incapable to attain the highest level of the economic scale."
Assessing the Wealth Divide
The research revealed that the gap between the wealth of the average person and someone in the top 10% was one million pounds in the mid-2000s, but had expanded to £1.3 million in real terms by the pandemic years.
The analyst added: "These differences are doubly concerning as wealth mobility in Britain is low – those who commence life wealthy tend to remain affluent, and vice versa."
Proportional Economic Disparity
Even with the economic divide widening in actual numbers, the share of overall assets in the UK possessed by the most affluent homes – called "proportional economic disparity" – has been "mostly consistent since the eighties," per the study.
Over this timeframe, complete net worth in the UK surged from thrice the yearly economic output, to almost 7.5 times.
Contributors of Economic Disparity
Termed "passive" increases, through rising house prices and adjustments to superannuation evaluations, were the primary factors of the widening wealth gap since 2010, according to the study.
These increases typically went to older, property-owning households, the research shows – intensifying the age-based economic gap.
Intergenerational Financial Divides
The typical financial disparity 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.
Geographic Variations
There were also stark geographic differences, with the average level of assets in 2020-22 reaching £290,000 in the southeastern region, where property prices have generally grown substantially, compared with £110k in the NE of England.
COVID Era Effects
During the pandemic, when millions of workers were supported by the public-funded employment protection, and pandemic lockdowns curtailed consumption options, the data shows many households were able to save, increasing their wealth.
More affluent homes achieved superior outcomes, though. "The typical family in the poorest fifth saw their available funds increase by just £80 during the COVID years (across the pandemic timeframe), broadly the same as the two years pre-pandemic. In contrast, the average household in the highest income quintile saw their liquid savings grow by 4,200 pounds," the report finds.
