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Based on new research, the typical worker in the UK would need 52 years' worth of income to attain the net worth of the wealthiest 10% of the population.

Expanding Financial Divide Through the Years

The study examined net worth statistics covering the Covid pandemic period and discovered that back in the mid-2000s, it would have needed 38 years' worth of median full-time earnings to join the wealthiest decile of the wealth distribution.

A research lead part of the study observed: "Wealth gaps in Britain are currently so significant that a regular employee setting aside their entire income during their working years would continue to be incapable to attain the highest level of the financial hierarchy."

Assessing the Wealth Divide

The analysis revealed that the disparity between the wealth of the average person and someone in the wealthiest decile was £1 million in 2006-08, but had increased to £1.3 million in inflation-adjusted terms by recent times.

The economist continued: "These disparities are doubly concerning as financial progression in Britain is restricted – individuals who begin life well-off tend to continue being rich, and conversely applies."

Comparative Financial Divide

Although the economic divide expanding in actual numbers, the portion of complete net worth in the UK owned by the most affluent homes – termed "relative wealth inequality" – has been "mostly consistent since the 1980s era," as stated in the research.

Over this timeframe, complete net worth in the UK rose substantially from triple the gross domestic product, to almost 7.5 times.

Drivers of Financial Divide

Referred to as "unearned" appreciation, by means of increasing property values and changes in retirement fund assessments, were the key contributors of the widening wealth gap since 2010, as stated in the study.

These increases generally flowed to older, property-owning households, the analysis reveals – exacerbating the age-based economic gap.

Generational Wealth Disparities

The median economic difference between people in their early 30s and those in their early 60s more than doubled in actual value, from 135 thousand pounds in 2006-08, to £310,000.

Geographic Disparities

Additionally, there were stark geographic differences, with the average level of wealth in the pandemic period reaching £290,000 in the SE of England, where property prices have generally grown substantially, as opposed to £110k in the NE of England.

COVID Era Effects

Throughout the COVID period, when numerous employees were covered under the government-supported job retention program, and pandemic lockdowns curtailed consumption options, the data shows numerous families were able to save, enhancing their financial standing.

Wealthier families fared much better, nevertheless. "The median home in the bottom income bracket saw their liquid savings increase by just £80 over the pandemic period (2019-20 to 2021-22), broadly the same as the pre-crisis period. In contrast, the typical family in the wealthiest fifth saw their liquid savings rise by £4,200," the report finds.