🔗 Share this article

Per new study, the average earner in the UK would need half a century of income to reach the net worth of the most affluent 10% of the population.

Expanding Economic Disparity Over Time

This research analyzed wealth distribution data including the 2020-22 timeframe and found that in 2006-08, it would have needed 38 years' worth of average worker salary to enter the top 10th of the financial hierarchy.

A research lead associated with the analysis stated: "Wealth gaps in Britain are currently so significant that a typical full-time employee setting aside their entire income during their working years would still not be able to reach the top of the economic scale."

Measuring the Economic Gap

The study revealed that the difference between the net worth of the average person and someone in the wealthiest decile was £1m in 2006-08, but had widened to 1.3 million pounds in actual value by recent times.

The researcher further stated: "These gaps are doubly concerning as wealth mobility in Britain is low – those who commence life affluent tend to stay wealthy, and conversely applies."

Comparative Financial Divide

Although the wealth gap expanding in actual numbers, the share of overall assets in the UK owned by the most affluent homes – known as "relative wealth inequality" – has been "largely unchanged since the 1980s era," according to the analysis.

Over this timeframe, total wealth in the UK surged from thrice the gross domestic product, to almost 7.5 times.

Drivers of Financial Divide

Referred to as "passive" appreciation, via growing real estate costs and variations in pension valuations, were the key contributors of the widening wealth gap from 2010 onward, per the study.

These appreciations generally flowed to elderly homeowners, the analysis reveals – exacerbating the generational financial disparity.

Age-Based Financial Divides

The median economic difference between individuals aged 30-34 and those in their early 60s increased over twofold in inflation-adjusted terms, from £135,000 in the mid-2000s, to 310 thousand pounds.

Regional Differences

There were also significant geographic differences, with the typical amount of net worth in 2020-22 amounting to £290k in the southeastern region, where property prices have generally grown substantially, compared with £110,000 in the northeastern region.

COVID Era Impact

Throughout the COVID period, when millions of workers were covered under the public-funded employment protection, and Covid shutdowns limited opportunities for spending, the statistics indicate numerous families were in a position to set aside money, growing their net worth.

Wealthier families fared much better, however. "The typical family in the poorest fifth saw their available funds grow by only eighty pounds throughout the health crisis (from 2019 to 2022), approximately equivalent to the 24 months before COVID. In contrast, the median home in the top income bracket saw their available funds increase by £4,200," the analysis concludes.