Based on recent analysis, the median worker in the UK would require 52 years' worth of earnings to achieve the wealth level of the richest 10% nationwide.
Growing Wealth Gap Over Time
The analysis reviewed net worth information covering the 2020-22 timeframe and determined that during the pre-financial crisis era, it would have required nearly four decades of median full-time earnings to join the richest segment of the wealth distribution.
A research lead associated with the analysis stated: "Economic disparities in Britain are now so large that a average worker saving all their earnings during their working years would remain unable to attain the highest level of the economic scale."
Quantifying the Financial Disparity
The study revealed that the difference between the wealth of the average person and someone in the top 10% was £1m in the pre-crisis period, but had expanded to 1.3 million pounds in inflation-adjusted terms by recent times.
The analyst continued: "These differences are particularly worrying as wealth mobility in Britain is restricted – individuals who begin life affluent tend to stay wealthy, and conversely applies."
Proportional Economic Disparity
Even with the financial disparity widening in specific figures, the share of overall assets in the UK held by the wealthiest families – known as "proportional economic disparity" – has been "broadly stable since the eighties," per the research.
Throughout these years, overall assets in the UK increased dramatically from thrice the gross domestic product, to almost 7.5 times.
Contributors of Economic Disparity
Termed "automatic" gains, via rising house prices and changes in superannuation evaluations, were the key contributors of the growing financial disparity since 2010, as stated in the report.
These appreciations typically went to elderly homeowners, the study demonstrates – worsening the generational financial disparity.
Age-Based Economic Gaps
The median economic difference between individuals aged 30-34 and sixty-somethings more than doubled in inflation-adjusted terms, from 135 thousand pounds in pre-financial crisis, to £310k.
Regional Differences
Additionally, there were stark area-based disparities, with the typical amount of net worth in 2020-22 amounting to £290k in the SE of England, where real estate values have generally grown substantially, compared with 110 thousand pounds in the northeastern region.
Pandemic Period Impact
Throughout the COVID period, when numerous employees were supported by the public-funded employment protection, and pandemic lockdowns limited opportunities for spending, the data shows many households were in a position to set aside money, growing their net worth.
Higher-income households fared much better, though. "The average household in the bottom income bracket saw their cash reserves increase by just £80 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 available funds grow by 4,200 pounds," the report finds.
