Based on recent research, the typical employee in the UK would have to work half a century of salary to achieve the financial standing of the most affluent 10% of the population.
Growing Financial Divide Across Decades
This research reviewed wealth distribution data covering the 2020-22 timeframe and determined that in 2006-08, it would have needed 38 years of typical employment income to enter the richest segment of the economic ladder.
A research lead part of the study stated: "Economic disparities in Britain are presently so substantial that a average worker saving all their earnings across their entire working life would continue to be incapable to attain the highest level of the economic scale."
Measuring the Wealth Divide
The analysis discovered that the gap between the assets of the typical individual and an individual in the wealthiest decile was £1m in 2006-08, but had increased to £1.3 million in actual value by 2020-22.
The analyst added: "These gaps are especially alarming as economic movement in Britain is restricted – people that start life well-off tend to remain affluent, and vice versa."
Comparative Financial Divide
Even with the economic divide widening in actual numbers, the percentage of total wealth in the UK owned by the most affluent homes – called "relative wealth inequality" – has been "largely unchanged since the eighties," per the research.
During this period, overall assets in the UK surged from triple the gross domestic product, to almost 7.5 times.
Drivers of Economic Disparity
Referred to as "unearned" gains, through growing real estate costs and adjustments to retirement fund assessments, were the key contributors of the growing financial disparity over the past decade, per the analysis.
These increases tended to accrue to older, property-owning households, the research shows – worsening the generational financial disparity.
Age-Based Economic Gaps
The median economic difference between thirty-somethings and people aged 60-64 grew by more than 100% in inflation-adjusted terms, from £135k in 2006-08, to £310k.
Area-Based Differences
There were also stark area-based disparities, with the average level of net worth in recent years standing at £290k in the SE of England, where housing costs have typically increased quickly, as opposed to £110k in the northeastern region.
COVID Era Effects
Amid the health crisis, when countless laborers were covered under the taxpayer-backed furlough scheme, and Covid shutdowns limited opportunities for spending, the information reveals countless homes were able to save, enhancing their financial standing.
Higher-income households achieved superior outcomes, however. "The average household in the lowest-income quintile saw their cash reserves grow by only eighty pounds over the pandemic period (2019-20 to 2021-22), approximately equivalent to the 24 months before COVID. Conversely, the average household in the top income bracket saw their available funds rise by £4,200," the analysis concludes.
