🔗 Share this article

Based on new research, the median employee in the UK would have to work half a century of earnings to achieve the net worth of the richest 10% of the population.

Widening Financial Divide Across Decades

The study examined net worth information from the recent health crisis years and discovered that back in 2006-08, it would have required 38 years of median full-time earnings to enter the richest segment of the wealth distribution.

An economic expert associated with the study observed: "Wealth gaps in Britain are presently so substantial that a regular employee saving all their earnings across their entire working life would still not be able to attain the highest level of the economic scale."

Assessing the Economic Gap

The study discovered that the disparity between the net worth of the median citizen and someone in the richest segment was one million pounds in 2006-08, but had widened to £1.3m in actual value by 2020-22.

The analyst further stated: "These gaps are especially alarming as financial progression in Britain is restricted – those who commence life affluent tend to remain affluent, and the opposite holds true."

Comparative Financial Divide

Despite the wealth gap widening in specific figures, the portion of total wealth in the UK owned by the most affluent homes – called "comparative financial divide" – has been "mostly consistent since the eighties," according to the analysis.

Throughout these years, total wealth in the UK surged from three times the yearly economic output, to approximately 7.5x.

Contributors of Wealth Inequality

Termed "automatic" increases, by means of rising house prices and variations in retirement fund assessments, were the main drivers of the widening wealth gap over the past decade, per the study.

These gains generally flowed to elderly homeowners, the study demonstrates – exacerbating the age-based economic gap.

Intergenerational Economic Gaps

The typical financial disparity between individuals aged 30-34 and people aged 60-64 increased over twofold in actual value, from £135k in the mid-2000s, to £310,000.

Regional Differences

There were also pronounced area-based disparities, with the typical amount of wealth in recent years reaching 290 thousand pounds in the southeastern region, where housing costs have tended to rise rapidly, versus £110,000 in the northeastern region.

COVID Era Effects

During the pandemic, when millions of workers were supported by the taxpayer-backed furlough scheme, and Covid shutdowns curtailed consumption options, the information reveals many households were capable of accumulating, growing their net worth.

Wealthier families achieved superior outcomes, nevertheless. "The median home in the lowest-income quintile saw their cash reserves rise by merely £80 during the COVID years (from 2019 to 2022), approximately equivalent to the 24 months before COVID. On the other hand, the average household in the wealthiest fifth saw their cash reserves grow by 4,200 pounds," the study reveals.