Based on fresh analysis, the average employee in the UK would have to work half a century of earnings to reach the financial standing of the wealthiest 10% in the country.
Expanding Financial Divide Over Time
This research reviewed wealth distribution statistics from the 2020-22 timeframe and determined that in 2006-08, it would have required 38 years of typical employment income to reach the top 10th of the economic ladder.
An economic expert associated with the report stated: "Economic disparities in Britain are presently so substantial that a regular employee saving all their earnings throughout their career would still not be able to reach the top of the financial hierarchy."
Measuring the Economic Gap
The analysis revealed that the difference between the wealth of the typical individual and a person belonging to the top 10% was one million pounds in the pre-crisis period, but had expanded to 1.3 million pounds in inflation-adjusted terms by recent times.
The researcher added: "These gaps are particularly worrying as financial progression in Britain is low – people that start life well-off tend to stay wealthy, and vice versa."
Relative Wealth Inequality
Even with the financial disparity widening in actual numbers, the share of total wealth in the UK owned by the most affluent homes – known as "proportional economic disparity" – has been "broadly stable since the eighties," according to the research.
Over this timeframe, overall assets in the UK increased dramatically from three times the annual GDP, to almost 7.5 times.
Contributors of Financial Divide
So-called "automatic" appreciation, through rising house prices and changes in superannuation evaluations, were the main drivers of the expanding economic divide since 2010, as stated in the report.
These increases typically went to senior citizens with real estate, the analysis reveals – intensifying the intergenerational wealth divide.
Age-Based Economic Gaps
The average wealth gap between individuals aged 30-34 and sixty-somethings more than doubled in actual value, from £135k in 2006-08, to £310,000.
Regional Disparities
Additionally, there were pronounced area-based disparities, with the average level of net worth in 2020-22 amounting to £290k in south-east England, where real estate values have typically increased quickly, compared with £110k in the northeastern region.
Health Crisis Years Consequences
Amid the health crisis, when millions of workers were covered under the public-funded employment protection, and health crisis restrictions limited opportunities for spending, the information reveals numerous families were in a position to set aside money, increasing their wealth.
Wealthier families fared much better, however. "The average household in the poorest fifth saw their available funds increase by just £80 throughout the health crisis (2019-20 to 2021-22), roughly identical to the pre-crisis period. Conversely, the average household in the highest income quintile saw their liquid savings increase by £4,200," the analysis concludes.
