🔗 Share this article

Per recent study, the median employee in the UK would need 52 years' worth of earnings to reach the financial standing of the wealthiest 10% in the country.

Expanding Financial Divide Over Time

The study examined wealth distribution information including the 2020-22 timeframe and determined that in the pre-financial crisis era, it would have taken nearly four decades of typical employment income to reach the top 10th of the wealth distribution.

An economic expert associated with the report stated: "Economic disparities in Britain are presently so substantial that a average worker setting aside their entire income throughout their career would remain unable to reach the top of the economic scale."

Assessing the Financial Disparity

The analysis discovered that the disparity between the assets of the median citizen and an individual in the wealthiest decile was one million pounds in the pre-crisis period, but had widened to £1.3 million in actual value by 2020-22.

The analyst added: "These gaps are doubly concerning as wealth mobility in Britain is restricted – individuals who begin life well-off tend to remain affluent, and conversely applies."

Comparative Financial Divide

Even with the financial disparity expanding in specific figures, the percentage of complete net worth in the UK held by the richest households – called "relative wealth inequality" – has been "largely unchanged since the 1980s era," as stated in the research.

Throughout these years, total wealth in the UK increased dramatically from three times the annual GDP, to almost 7.5 times.

Factors of Economic Disparity

So-called "passive" appreciation, through increasing property values and changes in superannuation evaluations, were the main drivers of the widening wealth gap over the past decade, per the report.

These appreciations generally flowed to older, property-owning households, the research shows – exacerbating the generational financial disparity.

Age-Based Financial Divides

The average wealth gap between individuals aged 30-34 and people aged 60-64 increased over twofold in inflation-adjusted terms, from £135k in 2006-08, to £310,000.

Regional Differences

There were also pronounced geographic differences, with the average level of assets in the pandemic period standing at 290 thousand pounds in the SE of England, where housing costs have typically increased quickly, as opposed to 110 thousand pounds in the NE of England.

COVID Era Consequences

During the pandemic, when millions of workers were protected by the taxpayer-backed furlough scheme, and Covid shutdowns limited opportunities for spending, the data shows many households were able to save, growing their net worth.

Higher-income households performed significantly better, though. "The median home in the poorest fifth saw their available funds grow by only eighty pounds over the pandemic period (from 2019 to 2022), approximately equivalent to the pre-crisis period. Conversely, the typical family in the wealthiest fifth saw their cash reserves increase by £4,200," the analysis concludes.