Based on new analysis, the median worker in the UK would require half a century of earnings to reach the wealth level of the richest 10% of the population.
Widening Wealth Gap Through the Years
The study analyzed wealth distribution statistics covering the Covid pandemic period and found that in 2006-08, it would have taken nearly four decades of typical employment income to enter the wealthiest decile of the economic ladder.
A senior economist associated with the report stated: "Wealth gaps in Britain are currently so significant that a average worker accumulating their complete salary across their entire working life would still not be able to reach the top of the wealth ladder."
Quantifying the Wealth Divide
The study revealed that the disparity between the net worth of the typical individual and an individual in the top 10% was £1m in 2006-08, but had expanded to £1.3 million in actual value by recent times.
The analyst continued: "These gaps are particularly worrying as wealth mobility in Britain is limited – people that start life affluent tend to remain affluent, and the opposite holds true."
Proportional Economic Disparity
Despite the economic divide growing in specific figures, the portion of total wealth in the UK possessed by the wealthiest families – known as "proportional economic disparity" – has been "largely unchanged since the eighties," per the study.
Throughout these years, total wealth in the UK surged from triple the yearly economic output, to approximately 7.5x.
Drivers of Economic Disparity
So-called "automatic" increases, through increasing property values and variations in superannuation evaluations, were the main drivers of the growing financial disparity over the past decade, according to the analysis.
These increases generally flowed to senior citizens with real estate, the research shows – intensifying the age-based economic gap.
Age-Based Wealth Disparities
The average wealth gap between thirty-somethings and those in their early 60s grew by more than 100% in actual value, from 135 thousand pounds in pre-financial crisis, to £310k.
Regional Variations
Additionally, there were stark geographic differences, with the average level of assets in 2020-22 amounting to £290,000 in the SE of England, where property prices have typically increased quickly, compared with £110k in the north-east.
Pandemic Period Impact
Amid the health crisis, when millions of workers were protected by the taxpayer-backed furlough scheme, and Covid shutdowns reduced expenditure possibilities, the data shows countless homes were capable of accumulating, increasing their wealth.
Higher-income households performed significantly better, however. "The average household in the poorest fifth saw their cash reserves rise by merely £80 over the pandemic period (from 2019 to 2022), roughly identical to the 24 months before COVID. In contrast, the typical family in the wealthiest fifth saw their cash reserves rise by £4,200," the study reveals.
