Per new study, the median worker in the UK would require 52 years' worth of salary to reach the net worth of the most affluent 10% of the population.
Growing Economic Disparity Across Decades
The study reviewed wealth distribution data covering the 2020-22 timeframe and discovered that in the mid-2000s, it would have needed nearly four decades of median full-time earnings to enter the richest segment of the financial hierarchy.
A senior economist involved with the study stated: "Wealth gaps in Britain are now so large that a typical full-time employee accumulating their complete salary throughout their career would still not be able to attain the highest level of the financial hierarchy."
Measuring the Financial Disparity
The analysis revealed that the difference between the wealth of the median citizen and someone in the wealthiest decile was £1 million in the mid-2000s, but had expanded to 1.3 million pounds in inflation-adjusted terms by the pandemic years.
The economist continued: "These disparities are particularly worrying as economic movement in Britain is limited – people that start life wealthy tend to remain affluent, and conversely applies."
Relative Wealth Inequality
Despite the wealth gap growing in absolute terms, the share of complete net worth in the UK owned by the wealthiest families – called "relative wealth inequality" – has been "broadly stable since the 1980s era," per the analysis.
During this period, overall assets in the UK surged from triple the gross domestic product, to nearly seven and a half times.
Contributors of Wealth Inequality
Referred to as "unearned" gains, through increasing property values and adjustments to pension valuations, were the main drivers of the expanding economic divide over the past decade, per the report.
These gains generally flowed to elderly homeowners, the study demonstrates – worsening the age-based economic gap.
Intergenerational Financial Divides
The typical financial disparity between people in their early 30s and people aged 60-64 grew by more than 100% in inflation-adjusted terms, from £135,000 in the mid-2000s, to £310k.
Geographic Disparities
Additionally, there were significant area-based disparities, with the typical amount of wealth in recent years standing at £290,000 in south-east England, where property prices have tended to rise rapidly, as opposed to £110,000 in the northeastern region.
Pandemic Period Impact
Throughout the COVID period, when millions of workers were covered under the public-funded employment protection, and Covid shutdowns reduced expenditure possibilities, the information reveals numerous families were able to save, increasing their wealth.
More affluent homes performed significantly better, however. "The median home in the bottom income bracket saw their cash reserves rise by merely £80 over the pandemic period (from 2019 to 2022), approximately equivalent to the pre-crisis period. In contrast, the median home in the wealthiest fifth saw their available funds rise by £4,200," the study reveals.
