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Based on fresh analysis, the typical earner in the UK would have to work half a century of earnings to achieve the net worth of the richest 10% in the country.

Expanding Financial Divide Through the Years

The study analyzed wealth distribution data from the Covid pandemic period and discovered that back in the mid-2000s, it would have needed 38 years' worth of typical employment income to reach the wealthiest decile of the wealth distribution.

An economic expert associated with the study commented: "Economic disparities in Britain are currently so significant that a regular employee accumulating their complete salary during their working years would still not be able to attain the highest level of the financial hierarchy."

Assessing the Financial Disparity

The analysis found that the disparity between the wealth of the typical individual and an individual in the wealthiest decile was £1 million in 2006-08, but had expanded to £1.3m in inflation-adjusted terms by the pandemic years.

The analyst further stated: "These differences are particularly worrying as wealth mobility in Britain is restricted – individuals who begin life well-off tend to remain affluent, and vice versa."

Relative Wealth Inequality

Although the economic divide growing in absolute terms, the share of overall assets in the UK possessed by the wealthiest families – known as "relative wealth inequality" – has been "mostly consistent since the 1980s era," per the study.

During this period, total wealth in the UK rose substantially from thrice the gross domestic product, to approximately 7.5x.

Contributors of Wealth Inequality

So-called "automatic" appreciation, through growing real estate costs and variations in pension valuations, were the key contributors of the growing financial disparity since 2010, as stated in the report.

These appreciations generally flowed to older, property-owning households, the study demonstrates – exacerbating the age-based economic gap.

Age-Based Wealth Disparities

The median economic difference between individuals aged 30-34 and sixty-somethings grew by more than 100% in real terms, from £135,000 in 2006-08, to £310k.

Area-Based Variations

There were also significant area-based disparities, with the typical amount of net worth in 2020-22 standing at £290k in the SE of England, where property prices have generally grown substantially, versus £110k in the northeastern region.

Pandemic Period Consequences

During the pandemic, when millions of workers were protected by the public-funded employment protection, and pandemic lockdowns limited opportunities for spending, the data shows numerous families were able to save, enhancing their financial standing.

Higher-income households fared much better, nevertheless. "The average household in the bottom income bracket saw their liquid savings grow by only eighty pounds throughout the health crisis (2019-20 to 2021-22), approximately equivalent to the two years pre-pandemic. Conversely, the average household in the top income bracket saw their cash reserves increase by £4,200," the study reveals.