Per new analysis, the median earner in the UK would need 52 years' worth of earnings to achieve the wealth level of the wealthiest 10% in the country.
Widening Financial Divide Over Time
This research examined wealth distribution statistics including the 2020-22 timeframe and determined that during 2006-08, it would have needed nearly four decades of typical employment income to join the wealthiest decile of the financial hierarchy.
A senior economist involved with the report stated: "Financial divides in Britain are now so large that a typical full-time employee setting aside their entire income during their working years would continue to be incapable to achieve the peak of the financial hierarchy."
Measuring the Wealth Divide
The analysis revealed that the disparity between the wealth of the average person and someone in the top 10% was £1 million in the pre-crisis period, but had widened to £1.3m in actual value by recent times.
The researcher added: "These gaps are especially alarming as wealth mobility in Britain is limited – people that start life well-off tend to continue being rich, and vice versa."
Relative Wealth Inequality
Even with the wealth gap widening in specific figures, the share of overall assets in the UK held by the richest households – termed "proportional economic disparity" – has been "broadly stable since the 1980s," per the analysis.
Over this timeframe, complete net worth in the UK surged from triple the yearly economic output, to almost 7.5 times.
Contributors of Financial Divide
So-called "automatic" increases, through growing real estate costs and changes in pension valuations, were the key contributors of the widening wealth gap since 2010, per the report.
These appreciations tended to accrue to senior citizens with real estate, the research shows – worsening the intergenerational wealth divide.
Generational Economic Gaps
The average wealth gap between people in their early 30s and people aged 60-64 grew by more than 100% in inflation-adjusted terms, from £135,000 in pre-financial crisis, to 310 thousand pounds.
Regional Differences
Additionally, there were stark area-based disparities, with the median value of assets in the pandemic period standing at £290,000 in south-east England, where real estate values have tended to rise rapidly, as opposed to £110k in the NE of England.
Health Crisis Years Impact
During the pandemic, when millions of workers were supported by the public-funded employment protection, and pandemic lockdowns reduced expenditure possibilities, the information reveals many households were able to save, growing their net worth.
Wealthier families fared much better, though. "The average household in the poorest fifth saw their liquid savings grow by only eighty pounds over the pandemic period (2019-20 to 2021-22), roughly identical to the two years pre-pandemic. On the other hand, the typical family in the highest income quintile saw their cash reserves rise by £4,200," the report finds.
