Based on recent research, the median earner in the UK would need 52 years' worth of earnings to achieve the wealth level of the most affluent 10% nationwide.
Expanding Financial Divide Over Time
The study examined financial assets information from the 2020-22 timeframe and found that back in the mid-2000s, it would have taken 38 years' worth of typical employment income to reach the wealthiest decile of the wealth distribution.
An economic expert part of the analysis stated: "Financial divides in Britain are now so large that a regular employee accumulating their complete salary throughout their career would remain unable to attain the highest level of the wealth ladder."
Quantifying the Wealth Divide
The study found that the gap between the wealth of the average person and someone in the richest segment was £1 million in the mid-2000s, but had expanded to £1.3 million in real terms by 2020-22.
The analyst added: "These gaps are particularly worrying as wealth mobility in Britain is low – individuals who begin life well-off tend to stay wealthy, and vice versa."
Proportional Economic Disparity
Despite the wealth gap expanding in absolute terms, the percentage of total wealth in the UK held by the richest households – termed "relative wealth inequality" – has been "largely unchanged since the 1980s," as stated in the analysis.
During this period, complete net worth in the UK increased dramatically from thrice the gross domestic product, to approximately 7.5x.
Drivers of Financial Divide
Termed "automatic" appreciation, by means of growing real estate costs and variations in retirement fund assessments, were the key contributors of the widening wealth gap since 2010, per the analysis.
These increases generally flowed to older, property-owning households, the study demonstrates – worsening the generational financial disparity.
Intergenerational Financial Divides
The typical financial disparity between individuals aged 30-34 and sixty-somethings increased over twofold in inflation-adjusted terms, from £135k in the mid-2000s, to £310,000.
Regional Disparities
Additionally, there were significant regional variations, with the average level of net worth in recent years standing at £290k in south-east England, where real estate values have typically increased quickly, as opposed to £110k in the NE of England.
Health Crisis Years Impact
Throughout the COVID period, when millions of workers were covered under the public-funded employment protection, and health crisis restrictions limited opportunities for spending, the information reveals many households were in a position to set aside money, growing their net worth.
More affluent homes performed significantly better, though. "The median home in the bottom income bracket saw their available funds rise by merely £80 during the COVID years (2019-20 to 2021-22), broadly the same as the 24 months before COVID. Conversely, the median home in the wealthiest fifth saw their available funds rise by £4,200," the analysis concludes.
