🔗 Share this article

Per new research, the average earner in the UK would need half a century of earnings to achieve the net worth of the richest 10% nationwide.

Expanding Financial Divide Over Time

This research analyzed wealth distribution statistics covering the 2020-22 timeframe and found that in the mid-2000s, it would have needed 38 years of typical employment income to reach the richest segment of the economic ladder.

A senior economist associated with the analysis observed: "Financial divides in Britain are presently so substantial that a average worker saving all their earnings across their entire working life would continue to be incapable to attain the highest level of the wealth ladder."

Measuring the Economic Gap

The analysis discovered that the gap between the assets of the average person and an individual 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 further stated: "These differences are particularly worrying as financial progression in Britain is limited – those who commence life wealthy tend to continue being rich, and the opposite holds true."

Relative Wealth Inequality

Even with the wealth gap widening in specific figures, the percentage of total wealth in the UK owned by the wealthiest families – called "proportional economic disparity" – has been "largely unchanged since the 1980s," as stated in the research.

Over this timeframe, total wealth in the UK rose substantially from three times the gross domestic product, to approximately 7.5x.

Contributors of Economic Disparity

Termed "unearned" appreciation, through growing real estate costs and adjustments to superannuation evaluations, were the key contributors of the expanding economic divide from 2010 onward, as stated in the analysis.

These appreciations generally flowed to older, property-owning households, the study demonstrates – exacerbating the intergenerational wealth divide.

Age-Based Financial Divides

The average wealth gap between individuals aged 30-34 and those in their early 60s more than doubled in inflation-adjusted terms, from £135k in the mid-2000s, to 310 thousand pounds.

Area-Based Variations

There were also stark regional variations, with the typical amount of assets in 2020-22 amounting to £290,000 in south-east England, where real estate values have generally grown substantially, versus £110k in the northeastern region.

Pandemic Period Impact

Throughout the COVID period, when countless laborers were supported by the taxpayer-backed furlough scheme, and pandemic lockdowns limited opportunities for spending, the information reveals numerous families were in a position to set aside money, growing their net worth.

Wealthier families fared much better, nevertheless. "The median home in the bottom income bracket saw their liquid savings rise by merely £80 during the COVID years (from 2019 to 2022), broadly the same as the 24 months before COVID. In contrast, the typical family in the top income bracket saw their cash reserves increase by £4,200," the study reveals.