Britain's Divided Decade

The article below highlights the battle Trade Unions face in fighting against the lowering of wages for their members. All we ask for is a fair day’s pay because we understand the direct link between an income that enables a family to save and an income that forces you to live in your overdraft.

The Workers of England Union, although a new and expanding Trade Union, fights hard on your behalf and desperately wants the divide between the poor and rich to close. We are not politically affiliated, and this article highlights how the main political parties have failed workers across the UK:

“Its findings will be seized on by Labour as evidence that any recovery from the downturn is uneven and not shared across all income groups. However, the trends uncovered by the SMF began before the Coalition came to power, underlining the huge impact of the credit crunch on levels of affluence.”

We urge all Trade Unions to put aside political affiliations and focus on policies that close the gap between rich and poor. Advocating the abolition of the Barnett formula—due to its unfair allocation of taxes—would be a good start. After reading the article below, please visit our campaign section and check the Barnett allocation for your area. You will be shocked at the level of spending your region is missing out on.

Britain’s Divided Decade: The Rich Are 64% Richer Than Before the Recession, While the Poor Are 57% Poorer

Uneven Recovery Across Income Groups

The gap between the richest and poorest has dramatically widened over the past decade. Wealthy households have paid off debts and accumulated savings following the financial crisis, while the worst-off families are far less financially secure. The Social Market Foundation (SMF) report Wealth in the Downturn: Winners and Losers reveals:

• Top 20% – Average wealth rose by 64% between 2005 and 2012–13, with savings and investments averaging around £10,000 (up from £6,000).
• Bottom 20% – Net wealth fell by 57%. Debt levels and reliance on overdrafts have increased.

Homeowners vs. Renters

Homeowners—particularly those who have paid off their mortgages—have become significantly more affluent compared with renters. Benefits include:

• Mortgage-free gains: Owners who cleared mortgages between 2005 and 2012 are £2,500 better off (excluding property value rises).
• Lower borrowing costs: Low‐interest mortgage rates versus higher rent costs have widened the wealth gap.

Inter-Generational Inequality

Younger workers have fallen behind older generations:

• The proportion of 26- to 35-year-olds buying homes fell from nearly 75% in 2005 to just over 50% in 2012–13.
• They hold less than a week’s income in savings, owe 45% more than in 2005, and increasingly rely on overdrafts for bills.

“There is a need to support those on lower incomes and younger age groups to save more. But this will be challenging, especially for those with little income to spare,” warns the SMF.

Policy Recommendations

To bridge the wealth gap and ensure an inclusive recovery:

1. Promote fair wage policies to secure a fair day’s pay.
2. Advocate the abolition of the Barnett formula for equitable tax distribution.
3. Support targeted savings initiatives for low-income and younger workers.
4. Ensure future spending allocations correct regional imbalances.

Read more about Britain’s divided decade and join our campaigns at Workers of England.