Per new research, the median earner in the UK would have to work 52 years' worth of earnings to achieve the wealth level of the wealthiest 10% in the country.
Expanding Wealth Gap Across Decades
The analysis reviewed wealth distribution data from the recent health crisis years and discovered that back in 2006-08, it would have taken 38 years' worth of average worker salary to join the top 10th of the financial hierarchy.
A research lead part of the report observed: "Wealth gaps in Britain are now so large that a average worker saving all their earnings during their working years would still not be able to attain the highest level of the economic scale."
Quantifying the Economic Gap
The study found that the gap between the wealth of the median citizen and an individual in the richest segment was one million pounds in the pre-crisis period, but had increased to £1.3 million in actual value by recent times.
The researcher further stated: "These differences are doubly concerning as financial progression in Britain is limited – those who commence life well-off tend to stay wealthy, and the opposite holds true."
Comparative Financial Divide
Even with the financial disparity widening in actual numbers, the share of overall assets in the UK held by the richest households – termed "comparative financial divide" – has been "largely unchanged since the eighties," per the study.
During this period, total wealth in the UK rose substantially from thrice the annual GDP, to almost 7.5 times.
Drivers of Financial Divide
So-called "automatic" gains, through increasing property values and variations in pension valuations, were the key contributors of the expanding economic divide over the past decade, per the study.
These increases tended to accrue to older, property-owning households, the study demonstrates – worsening the intergenerational wealth divide.
Age-Based Financial Divides
The median economic difference between thirty-somethings and sixty-somethings increased over twofold in real terms, from £135,000 in 2006-08, to £310,000.
Geographic Differences
Additionally, there were significant regional variations, with the average level of net worth in 2020-22 reaching £290,000 in south-east England, where property prices have tended to rise rapidly, as opposed to 110 thousand pounds in the north-east.
Health Crisis Years Effects
During the pandemic, when millions of workers were covered under the public-funded employment protection, and pandemic lockdowns limited opportunities for spending, the statistics indicate countless homes were capable of accumulating, enhancing their financial standing.
More affluent homes performed significantly better, though. "The median home in the lowest-income quintile saw their cash reserves grow by only eighty pounds over the pandemic period (2019-20 to 2021-22), roughly identical to the 24 months before COVID. In contrast, the median home in the wealthiest fifth saw their liquid savings increase by £4,200," the analysis concludes.
