The average worker in the UK faces significant challenges in achieving the wealth status of the top 10%. A recent report from the Resolution Foundation reveals that it would take 52 years of average earnings for a typical employee to reach this elite financial bracket. This analysis utilizes data from the Office for National Statistics, focusing on the wealth landscape during the Covid pandemic from 2020 to 2022.
Wealth Disparities in the UK
In previous years, specifically between 2006 and 2008, it took only 38 years of median full-time earnings to access the top 10% of wealth holders. The gap has significantly widened since then, reaching 52 years by the 2020-22 period. This alarming trend highlights the growing inequality in income and wealth distribution.
Key Statistics
- 2006-08 wealth gap: £1 million
- 2020-22 wealth gap: £1.3 million (adjusted for inflation)
- Wealth gap between individuals in their 30s and 60s: increased from £135,000 to £310,000
- Average wealth in south-east England: £290,000
- Average wealth in north-east England: £110,000
Economic Impacts of the Pandemic
During the Covid-19 pandemic, many households managed to accrue savings due to reduced spending opportunities and government support schemes like furlough. However, the benefits were not evenly distributed. In fact, families in the lowest income quintile saw liquid savings increase by just £80 during the pandemic, while their higher-income counterparts increased savings by £4,200.
Wealth Inequality Trends
Molly Broome, a senior economist at the Resolution Foundation and lead report author, emphasized that wealth mobility in the UK remains low. Those born into wealth are likely to stay wealthy, preserving systemic inequality. Despite the widening gap in absolute wealth, the share of total wealth held by the richest households has remained relatively stable since the 1980s.
The report attributes much of this widening wealth gap to “passive” income gains, primarily driven by rising property values and fluctuating pension valuations. These financial benefits disproportionately favor older, property-owning individuals, thereby exacerbating intergenerational disparities in wealth.
Conclusion
As the wealth gap continues to widen, addressing these disparities is crucial for economic stability and social equity. The findings highlight the pressing need for policies aimed at improving wealth distribution in the UK.
