🔗 Share this article

According to fresh analysis, the average worker in the UK would have to work 52 years' worth of income to attain the financial standing of the most affluent 10% of the population.

Expanding Economic Disparity Over Time

The study analyzed wealth distribution information from the 2020-22 timeframe and discovered that in 2006-08, it would have taken 38 years' worth of average worker salary to join the richest segment of the wealth distribution.

A senior economist involved with the study stated: "Economic disparities in Britain are currently so significant that a average worker setting aside their entire income across their entire working life would continue to be incapable to attain the highest level of the wealth ladder."

Assessing the Financial Disparity

The analysis found that the difference between the assets 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 recent times.

The analyst further stated: "These disparities are particularly worrying as wealth mobility in Britain is restricted – individuals who begin life wealthy tend to continue being rich, and the opposite holds true."

Proportional Economic Disparity

Despite the economic divide widening in actual numbers, the share of total wealth in the UK held by the most affluent homes – termed "proportional economic disparity" – has been "largely unchanged since the eighties," as stated in the study.

Over this timeframe, overall assets in the UK rose substantially from thrice the gross domestic product, to almost 7.5 times.

Drivers of Economic Disparity

So-called "unearned" increases, by means of growing real estate costs and variations in pension valuations, were the primary factors of the expanding economic divide over the past decade, per the study.

These appreciations tended to accrue to elderly homeowners, the study demonstrates – worsening the age-based economic gap.

Intergenerational Financial Divides

The average wealth gap between thirty-somethings and those in their early 60s grew by more than 100% in real terms, from £135,000 in the mid-2000s, to £310k.

Area-Based Variations

There were also pronounced area-based disparities, with the typical amount of net worth in recent years reaching £290,000 in the SE of England, where property prices have typically increased quickly, compared with £110k in the north-east.

Pandemic Period Effects

During the pandemic, when numerous employees were covered under the government-supported job retention program, and Covid shutdowns limited opportunities for spending, the information reveals many households were able to save, growing their net worth.

More affluent homes performed significantly better, though. "The typical family in the poorest fifth saw their cash reserves rise by merely £80 throughout the health crisis (2019-20 to 2021-22), approximately equivalent to the pre-crisis period. In contrast, the typical family in the highest income quintile saw their liquid savings increase by £4,200," the analysis concludes.