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According to new research, the average employee in the UK would need over five decades of earnings to reach the financial standing of the richest 10% in the country.

Widening Wealth Gap Over Time

The study examined wealth distribution data covering the recent health crisis years and discovered that back in the pre-financial crisis era, it would have taken 38 years of average worker salary to join the wealthiest decile of the wealth distribution.

A senior economist involved with the report commented: "Wealth gaps in Britain are presently so substantial that a typical full-time employee saving all their earnings across their entire working life would continue to be incapable to attain the highest level of the wealth ladder."

Quantifying the Financial Disparity

The analysis revealed that the gap between the assets of the typical individual and someone in the top 10% was £1 million in the pre-crisis period, but had expanded to £1.3m in real terms by 2020-22.

The researcher continued: "These disparities are especially alarming as wealth mobility in Britain is restricted – those who commence life well-off tend to remain affluent, and the opposite holds true."

Comparative Financial Divide

Although the economic divide growing in absolute terms, the portion of complete net worth in the UK possessed by the most affluent homes – termed "relative wealth inequality" – has been "broadly stable since the 1980s era," as stated in the research.

Throughout these years, complete net worth in the UK surged from thrice the annual GDP, to nearly seven and a half times.

Drivers of Financial Divide

So-called "passive" increases, through rising house prices and adjustments to retirement fund assessments, were the key contributors of the expanding economic divide from 2010 onward, as stated in the study.

These gains typically went to older, property-owning households, the analysis reveals – worsening the age-based economic gap.

Age-Based Economic Gaps

The average wealth gap between individuals aged 30-34 and sixty-somethings more than doubled in inflation-adjusted terms, from 135 thousand pounds in the mid-2000s, to 310 thousand pounds.

Geographic Disparities

Additionally, there were stark regional variations, with the average level of assets in 2020-22 standing at £290,000 in the SE of England, where real estate values have tended to rise rapidly, as opposed to £110k in the north-east.

COVID Era Impact

Amid the health crisis, when millions of workers were protected by the government-supported job retention program, and pandemic lockdowns curtailed consumption options, the information reveals countless homes were capable of accumulating, growing their net worth.

Wealthier families fared much better, however. "The median home in the bottom income bracket saw their available funds increase by just £80 during the COVID years (from 2019 to 2022), approximately equivalent to the 24 months before COVID. Conversely, the typical family in the highest income quintile saw their cash reserves grow by 4,200 pounds," the report finds.