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Per new study, the typical employee in the UK would have to work over five decades of income to attain the financial standing of the most affluent 10% in the country.

Widening Financial Divide Across Decades

This research reviewed net worth data from the recent health crisis years and determined that in the pre-financial crisis era, it would have needed 38 years of average worker salary to reach the top 10th of the financial hierarchy.

A senior economist part of the report observed: "Wealth gaps in Britain are currently so significant that a average worker setting aside their entire income across their entire working life would still not be able to reach the top of the financial hierarchy."

Assessing the Economic Gap

The study revealed that the disparity between the net worth of the average person and a person belonging to the top 10% was £1m in the mid-2000s, but had expanded to 1.3 million pounds in inflation-adjusted terms by the pandemic years.

The researcher further stated: "These gaps are doubly concerning as economic movement in Britain is limited – individuals who begin life wealthy tend to stay wealthy, and the opposite holds true."

Comparative Financial Divide

Even with the wealth gap widening in absolute terms, the portion of complete net worth in the UK held by the richest households – called "comparative financial divide" – has been "mostly consistent since the 1980s era," per the study.

Throughout these years, complete net worth in the UK rose substantially from thrice the gross domestic product, to nearly seven and a half times.

Contributors of Economic Disparity

So-called "unearned" increases, through growing real estate costs and variations in superannuation evaluations, were the key contributors of the expanding economic divide from 2010 onward, as stated in the report.

These appreciations typically went to older, property-owning households, the research shows – intensifying the intergenerational wealth divide.

Intergenerational Wealth Disparities

The average wealth gap between individuals aged 30-34 and those in their early 60s increased over twofold in real terms, from £135k in 2006-08, to £310k.

Regional Disparities

Furthermore, the study revealed significant area-based disparities, with the typical amount of wealth in recent years reaching 290 thousand pounds in the SE of England, where housing costs have tended to rise rapidly, as opposed to 110 thousand pounds in the northeastern region.

COVID Era Effects

During the pandemic, when numerous employees were supported by the public-funded employment protection, and health crisis restrictions limited opportunities for spending, the information reveals countless homes were in a position to set aside money, increasing their wealth.

More affluent homes performed significantly better, however. "The average household in the poorest fifth saw their liquid savings rise by merely £80 during the COVID years (across the pandemic timeframe), broadly the same as the pre-crisis period. On the other hand, the median home in the wealthiest fifth saw their liquid savings grow by 4,200 pounds," the report finds.