Based on recent analysis, the median earner in the UK would need half a century of salary to achieve the net worth of the richest 10% nationwide.
Growing Wealth Gap Across Decades
The study examined wealth distribution information including the recent health crisis years and discovered that back in the pre-financial crisis era, it would have taken nearly four decades of typical employment income to reach the wealthiest decile of the wealth distribution.
A senior economist associated with the study stated: "Economic disparities in Britain are now so large that a typical full-time employee saving all their earnings throughout their career would remain unable to reach the top of the financial hierarchy."
Assessing the Financial Disparity
The analysis found that the disparity between the net worth of the typical individual and someone in the wealthiest decile was £1 million in 2006-08, but had increased to £1.3 million in inflation-adjusted terms by the pandemic years.
The economist continued: "These gaps are especially alarming as wealth mobility in Britain is limited – individuals who begin life well-off tend to continue being rich, and vice versa."
Relative Wealth Inequality
Although the wealth gap expanding in specific figures, the portion of total wealth in the UK possessed by the wealthiest families – called "proportional economic disparity" – has been "mostly consistent since the 1980s," as stated in the study.
Over this timeframe, overall assets in the UK rose substantially from thrice the gross domestic product, to almost 7.5 times.
Drivers of Financial Divide
So-called "passive" appreciation, via rising house prices and variations in pension valuations, were the main drivers of the growing financial disparity from 2010 onward, per the report.
These appreciations generally flowed to senior citizens with real estate, the research shows – worsening the age-based economic gap.
Age-Based Wealth Disparities
The median economic difference between individuals aged 30-34 and those in their early 60s increased over twofold in real terms, from £135,000 in pre-financial crisis, to 310 thousand pounds.
Area-Based Variations
Furthermore, the study revealed pronounced geographic differences, with the typical amount of assets in recent years amounting to £290k in south-east England, where housing costs have generally grown substantially, versus £110k in the north-east.
Health Crisis Years Consequences
Throughout the COVID period, when numerous employees were protected by the government-supported job retention program, and pandemic lockdowns curtailed consumption options, the data shows countless homes were able to save, increasing their wealth.
More affluent homes achieved superior outcomes, however. "The typical family in the bottom income bracket saw their cash reserves grow by only eighty pounds throughout the health crisis (from 2019 to 2022), broadly the same as the pre-crisis period. On the other hand, the typical family in the top income bracket saw their available funds grow by 4,200 pounds," the report finds.
