🔗 Share this article

According to new research, the average worker in the UK would need 52 years' worth of income to achieve the financial standing of the wealthiest 10% nationwide.

Widening Financial Divide Over Time

This research analyzed wealth distribution statistics including the 2020-22 timeframe and determined that back in 2006-08, it would have taken nearly four decades of average worker salary to reach the richest segment of the wealth distribution.

A senior economist part of the study stated: "Financial divides in Britain are currently so significant that a average worker accumulating their complete salary throughout their career would continue to be incapable to attain the highest level of the economic scale."

Measuring the Financial Disparity

The study discovered that the disparity between the wealth of the typical individual and someone in the top 10% was £1m in the pre-crisis period, but had increased to 1.3 million pounds in actual value by 2020-22.

The economist further stated: "These gaps are particularly worrying as wealth mobility in Britain is limited – individuals who begin life well-off tend to stay wealthy, and conversely applies."

Relative Wealth Inequality

Although the wealth gap expanding in specific figures, the share of total wealth in the UK possessed by the most affluent homes – known as "proportional economic disparity" – has been "largely unchanged since the 1980s era," per the analysis.

Throughout these years, complete net worth in the UK increased dramatically from triple the yearly economic output, to almost 7.5 times.

Drivers of Economic Disparity

Referred to as "passive" increases, through rising house prices and adjustments to superannuation evaluations, were the main drivers of the growing financial disparity over the past decade, as stated in the analysis.

These increases generally flowed to elderly homeowners, the analysis reveals – exacerbating the age-based economic gap.

Intergenerational Economic Gaps

The typical financial disparity between people in their early 30s and sixty-somethings more than doubled in real terms, from 135 thousand pounds in pre-financial crisis, to 310 thousand pounds.

Regional Differences

Additionally, there were pronounced area-based disparities, with the average level of net worth in the pandemic period amounting to 290 thousand pounds in the southeastern region, where real estate values have typically increased quickly, as opposed to 110 thousand pounds in the north-east.

Health Crisis Years Consequences

Amid the health crisis, when numerous employees were covered under the public-funded employment protection, and pandemic lockdowns limited opportunities for spending, the statistics indicate many households were in a position to set aside money, increasing their wealth.

Higher-income households performed significantly better, however. "The typical family in the poorest fifth saw their liquid savings rise by merely £80 during the COVID years (2019-20 to 2021-22), roughly identical to the pre-crisis period. Conversely, the average household in the top income bracket saw their cash reserves grow by 4,200 pounds," the analysis concludes.