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Per new analysis, the typical employee in the UK would require over five decades of salary to reach the net worth of the wealthiest 10% in the country.

Widening Wealth Gap Over Time

This research analyzed wealth distribution data including the 2020-22 timeframe and determined that in 2006-08, it would have taken 38 years of typical employment income to reach the wealthiest decile of the financial hierarchy.

A senior economist part of the study commented: "Financial divides in Britain are currently so significant that a average worker saving all their earnings throughout their career would remain unable to achieve the peak of the financial hierarchy."

Assessing the Wealth Divide

The analysis found that the gap between the net worth of the average person and a person belonging to the wealthiest decile was one million pounds in the pre-crisis period, but had widened to £1.3 million in actual value by recent times.

The economist further stated: "These gaps are especially alarming as wealth mobility in Britain is low – people that start life affluent tend to stay wealthy, and the opposite holds true."

Comparative Financial Divide

Despite the wealth gap widening in absolute terms, the portion of overall assets in the UK held by the most affluent homes – called "relative wealth inequality" – has been "broadly stable since the 1980s era," according to the research.

Throughout these years, complete net worth in the UK increased dramatically from thrice the yearly economic output, to approximately 7.5x.

Drivers of Wealth Inequality

So-called "automatic" gains, via growing real estate costs and adjustments to retirement fund assessments, were the key contributors of the widening wealth gap over the past decade, according to the report.

These gains typically went to elderly homeowners, the study demonstrates – worsening the intergenerational wealth divide.

Age-Based Wealth Disparities

The typical financial disparity between people in their early 30s and sixty-somethings increased over twofold in actual value, from £135,000 in 2006-08, to £310,000.

Geographic Differences

Furthermore, the study revealed stark geographic differences, with the typical amount of assets in 2020-22 reaching £290,000 in south-east England, where housing costs have tended to rise rapidly, compared with £110,000 in the NE of England.

Pandemic Period Consequences

During the pandemic, when numerous employees were supported by the public-funded employment protection, and pandemic lockdowns limited opportunities for spending, the statistics indicate many households were in a position to set aside money, increasing their wealth.

Higher-income households fared much better, nevertheless. "The median home in the poorest fifth saw their cash reserves increase by just £80 throughout the health crisis (across the pandemic timeframe), roughly identical to the two years pre-pandemic. In contrast, the median home in the wealthiest fifth saw their available funds increase by £4,200," the analysis concludes.