What's happened
New research from the Resolution Foundation shows it would take the average UK worker 52 years of savings to reach the wealth of the top 10%, up from 38 years in 2006-08. Wealth inequality has grown, driven mainly by passive gains like rising house prices, with regional disparities widening. The report warns of entrenched intergenerational gaps.
What's behind the headline?
The widening wealth gap in Britain reflects structural issues that will likely persist.
- The reliance on passive income sources such as rising house prices and pension valuations has disproportionately benefited older, property-owning households, deepening intergenerational divides.
- The data shows that a typical full-time worker would need over 50 years of savings to reach the wealth of the top 10%, a stark indicator of entrenched inequality.
- Regional disparities, notably between the South East and North East, underscore how external factors like property markets influence wealth accumulation.
- The low mobility of wealth means that those born into wealth tend to stay wealthy, and vice versa, making social mobility a key challenge.
- Policy responses, such as potential wealth taxes, risk falling on pensioners and homeowners rather than the ultra-rich, complicating efforts to address inequality.
This trend suggests that without significant policy intervention, wealth inequality will continue to entrench, impacting social cohesion and economic mobility in Britain.
What the papers say
The Independent reports that it would take the average Brit 52 years of savings to reach the wealth of the top 10%, highlighting the scale of inequality. The Guardian emphasizes that this gap has widened from 38 years in 2006-08, with the disparity driven mainly by passive gains like rising house prices and pension values. Bloomberg succinctly notes that this increase from 38 to 52 years reflects a growing wealth divide, emphasizing the persistent and widening nature of inequality. All sources agree that passive income sources are the primary drivers of this trend, with regional disparities exacerbating the issue. The Guardian and The Independent both warn that policy measures like wealth taxes could disproportionately impact pensioners and homeowners, complicating efforts to reduce inequality.
How we got here
The research analyzes data from the Office for National Statistics covering 2006-08 through 2020-22. It highlights how wealth accumulation has become increasingly skewed towards the already wealthy, with passive income sources like property and pensions playing a significant role. The pandemic period saw some household savings increase, but wealth gaps persisted, especially among high-income households and in regions like the South East.
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Common question
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Why Is the UK Wealth Gap Widening and What Does It Mean for You?
The UK’s wealth gap has been growing steadily over the past two decades, with the richest pulling further ahead of the rest. New research shows it now takes the average worker over 50 years of savings to match the wealth of the top 10%. But what’s driving this inequality, and how does it affect different regions and generations? Below, we explore the key reasons behind the widening wealth gap and answer common questions about this pressing issue.
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The widening wealth gap is a pressing issue that affects everyone, from homeowners to future generations. Recent research shows that it now takes the average UK worker over 50 years of savings to match the wealth of the top 10%. This stark reality raises questions about how rising inequality impacts daily life, housing prices, and long-term economic stability. Below, we explore key questions to help you understand what this means for you and what can be done about it.
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More on these topics
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The Resolution Foundation is an independent British think tank established in 2005. Its stated aim is to improve the standard of living of low- and middle-income families.
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The Office for National Statistics is the executive office of the UK Statistics Authority, a non-ministerial department which reports directly to the UK Parliament.