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According to recent study, the median worker in the UK would require over five decades of salary to reach the net worth of the most affluent 10% nationwide.

Growing Economic Disparity Through the Years

This research analyzed net worth statistics from the 2020-22 timeframe and discovered that in 2006-08, it would have needed nearly four decades of typical employment income to join the richest segment of the financial hierarchy.

A senior economist part of the analysis stated: "Wealth gaps in Britain are currently so significant that a average worker saving all their earnings during their working years would still not be able to reach the top of the financial hierarchy."

Measuring the Wealth Divide

The research found that the gap between the net worth of the average person and a person belonging to the top 10% was £1 million in the mid-2000s, but had widened to 1.3 million pounds in real terms by recent times.

The researcher added: "These disparities are especially alarming as wealth mobility in Britain is limited – people that start life affluent tend to stay wealthy, and the opposite holds true."

Proportional Economic Disparity

Despite the wealth gap growing in absolute terms, the portion of overall assets in the UK owned by the wealthiest families – termed "relative wealth inequality" – has been "largely unchanged since the 1980s era," per the study.

During this period, overall assets in the UK surged from three times the annual GDP, to nearly seven and a half times.

Drivers of Economic Disparity

So-called "unearned" appreciation, by means of rising house prices and adjustments to retirement fund assessments, were the main drivers of the expanding economic divide since 2010, per the analysis.

These increases typically went to older, property-owning households, the analysis reveals – intensifying the generational financial disparity.

Intergenerational Financial Divides

The median economic difference between people in their early 30s and those in their early 60s more than doubled in real terms, from £135k in the mid-2000s, to 310 thousand pounds.

Geographic Disparities

Furthermore, the study revealed significant regional variations, with the typical amount of assets in the pandemic period standing at 290 thousand pounds in the southeastern region, where property prices have tended to rise rapidly, as opposed to £110k in the northeastern region.

Pandemic Period Effects

Amid the health crisis, when millions of workers were supported by the taxpayer-backed furlough scheme, and health crisis restrictions limited opportunities for spending, the data shows countless homes were in a position to set aside money, growing their net worth.

Wealthier families fared much better, nevertheless. "The average household in the lowest-income quintile saw their cash reserves rise by merely £80 during the COVID years (from 2019 to 2022), broadly the same as the 24 months before COVID. On the other hand, the typical family in the highest income quintile saw their liquid savings grow by 4,200 pounds," the analysis concludes.