Based on fresh study, the median earner in the UK would require over five decades of income to achieve the financial standing of the richest 10% of the population.
Widening Wealth Gap Across Decades
The study reviewed wealth distribution data including the Covid pandemic period and determined that back in 2006-08, it would have needed nearly four decades of typical employment income to enter the top 10th of the economic ladder.
A senior economist part of the report observed: "Economic disparities in Britain are now so large that a regular employee accumulating their complete salary across their entire working life would remain unable to reach the top of the economic scale."
Measuring the Financial Disparity
The research found that the disparity between the net worth of the median citizen and someone in the top 10% was £1 million in the pre-crisis period, but had increased to £1.3 million in real terms by the pandemic years.
The economist continued: "These differences are especially alarming as economic movement in Britain is low – those who commence life wealthy tend to continue being rich, and vice versa."
Proportional Economic Disparity
Even with the economic divide growing in actual numbers, the portion of overall assets in the UK possessed by the richest households – known as "proportional economic disparity" – has been "largely unchanged since the eighties," per the study.
During this period, overall assets in the UK rose substantially from thrice the yearly economic output, to approximately 7.5x.
Drivers of Wealth Inequality
Termed "automatic" gains, via growing real estate costs and changes in superannuation evaluations, were the key contributors of the expanding economic divide from 2010 onward, according to the study.
These increases typically went to older, property-owning households, the analysis reveals – worsening the intergenerational wealth divide.
Generational Financial Divides
The average wealth gap between people in their early 30s and those in their early 60s more than doubled in real terms, from £135,000 in the mid-2000s, to 310 thousand pounds.
Regional Differences
There were also significant geographic differences, with the median value of wealth in 2020-22 standing at 290 thousand pounds in the southeastern region, where real estate values have tended to rise rapidly, compared with £110,000 in the NE of England.
Pandemic Period Effects
Throughout the COVID period, when numerous employees were covered under the public-funded employment protection, and pandemic lockdowns limited opportunities for spending, the statistics indicate numerous families were capable of accumulating, growing their net worth.
More affluent homes achieved superior outcomes, however. "The typical family in the poorest fifth saw their available funds grow by only eighty pounds over the pandemic period (from 2019 to 2022), roughly identical to the 24 months before COVID. In contrast, the median home in the wealthiest fifth saw their liquid savings grow by 4,200 pounds," the report finds.
