According to recent research, the average worker in the UK would require over five decades of income to achieve the net worth of the richest 10% nationwide.
Expanding Wealth Gap Across Decades
The analysis reviewed net worth data from the 2020-22 timeframe and found that in the mid-2000s, it would have needed nearly four decades of average worker salary to join the richest segment of the financial hierarchy.
A research lead part of the study observed: "Financial divides in Britain are presently so substantial that a average worker setting aside their entire income throughout their career would still not be able to attain the highest level of the economic scale."
Measuring the Financial Disparity
The study found that the disparity between the assets of the average person and someone in the richest segment was £1 million in 2006-08, but had expanded to £1.3 million in real terms by 2020-22.
The researcher added: "These gaps are particularly worrying as wealth mobility in Britain is restricted – people that start life wealthy tend to continue being rich, and the opposite holds true."
Proportional Economic Disparity
Even with the wealth gap growing in specific figures, the share of total wealth in the UK owned by the wealthiest families – called "comparative financial divide" – has been "mostly consistent since the eighties," as stated in the study.
Over this timeframe, overall assets in the UK surged from thrice the gross domestic product, to approximately 7.5x.
Drivers of Economic Disparity
So-called "automatic" increases, via growing real estate costs and changes in retirement fund assessments, were the primary factors of the growing financial disparity over the past decade, as stated in the study.
These gains typically went to senior citizens with real estate, the research shows – worsening the age-based economic gap.
Generational Economic Gaps
The average wealth gap between thirty-somethings and people aged 60-64 more than doubled in real terms, from £135k in pre-financial crisis, to £310,000.
Area-Based Variations
Additionally, there were significant regional variations, with the typical amount of net worth in recent years amounting to £290,000 in south-east England, where real estate values have generally grown substantially, as opposed to £110k in the north-east.
Health Crisis Years Consequences
Throughout the COVID period, when countless laborers were protected by the public-funded employment protection, and health crisis restrictions limited opportunities for spending, the data shows numerous families were in a position to set aside money, enhancing their financial standing.
Wealthier families performed significantly better, nevertheless. "The median home in the poorest fifth saw their available funds grow by only eighty pounds during the COVID years (from 2019 to 2022), roughly identical to the pre-crisis period. On the other hand, the typical family in the top income bracket saw their cash reserves increase by £4,200," the study reveals.
