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average UK Workers will need to save their earnings for 52 years to move to the top ladder of wealthNew research shows.
It would take just over half a century of savings with no outgoings for the average Briton to raise the £1.3 million needed to make the move from the middle to the top bracket. richest in the nationaccording to resolution foundation,
think tank’s before the fall Report, which examines the scale and distribution of household Property Across the UK, it said intergenerational inequality had “worsened” between 2006–08 and 2020–22, warning of a “widening wealth gap” that “reflects the growing importance of your parents, rather than how hard you work, in shaping lifelong living standards”.
Using data from the Office for National Statistics’ Wealth and Assets Survey, analysts found that while Britain’s stock of wealth continued to rise during the pandemic, reaching a new record high of 7.5 times GDP, the wealth gap between rich and poor households has widened “rapidly”.
Molly Broome, senior economist at the Resolution Foundation, said the wealth gap between the richest and poorest in the country had “doubled” due to low rates of wealth mobility across the country.
“Wealth gaps in the UK are now so large that a typical full-time employee saving all their earnings over their entire working life would still not be able to reach the top of the wealth ladder,” she explained.
“These gaps are compounded because wealth mobility is low in the UK – people who start life richer tend to stay richer, and vice versa.”
According to analysts, factors including existing wealth, age and location also had a huge impact on how wealthy Britons are. Their research revealed that the wealth gap between people in their early 30s and people in their early 60s has more than doubled between 2006-08 and 2020-22, from £135,000 to £310,000 (in real cash terms).
The researchers added 53 percent of the increase in household income in the early 2010s came through “passive” income such as rising home prices, rather than “active behavior,” which primarily benefited the already wealthy.
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People in the South East were also found to have an average wealth of £290,000 – significantly higher than those in the North East, who had £110,000.
Ms Broom blamed changes in the value of pensions for boosting house prices and increasing the wealth gap, adding it was external factors “rather than any active behavior on the part of individuals, such as buying homes or acquiring new property” that widened the gap.
Some economists have suggested that Chancellor Rachel Reeves could introduce a wealth tax in a bid to plug the £50bn hole in the next budget, despite Labour’s manifesto promise not to raise taxes.
But Ms Broom warned any future wealth taxes introduced by the Government could fall on pensioners or home owners rather than being paid by the country’s richest.
“The acute need for money and more revenue has prompted fresh talks of wealth taxes ahead of the Budget next month,” she said.
“But with property and pensions now representing 80 per cent of the growing bulk of household wealth, we need to be honest that higher wealth taxes are more likely to fall on pensioners, southern home owners or their families, rather than being paid only by the super-rich.”
A spokesperson for HM Treasury said: “The UK income tax system is highly progressive, with a high personal allowance at international levels.
“We are also taxing wealth by getting rid of non-lawyer status in the tax system, we put VAT on private school fees and we have increased taxes on private jets.”