According to new study, the typical earner in the UK would need over five decades of income to attain the wealth level of the most affluent 10% in the country.
Growing Wealth Gap Across Decades
The analysis analyzed financial assets statistics from the Covid pandemic period and determined that during the mid-2000s, it would have taken 38 years' worth of average worker salary to reach the richest segment of the economic ladder.
An economic expert involved with the study commented: "Wealth gaps in Britain are presently so substantial that a regular employee saving all their earnings throughout their career would still not be able to attain the highest level of the economic scale."
Measuring the Wealth Divide
The analysis found that the gap between the net worth of the average person and an individual in the richest segment was £1 million in the mid-2000s, but had increased to £1.3 million in inflation-adjusted terms by the pandemic years.
The analyst added: "These disparities are doubly concerning as financial progression in Britain is restricted – individuals who begin life well-off tend to continue being rich, and conversely applies."
Proportional Economic Disparity
Although the wealth gap widening in specific figures, the share of overall assets in the UK possessed by the richest households – termed "comparative financial divide" – has been "largely unchanged since the 1980s era," per the study.
During this period, overall assets in the UK surged from thrice the yearly economic output, to nearly seven and a half times.
Factors of Financial Divide
So-called "passive" gains, by means of growing real estate costs and adjustments to retirement fund assessments, were the primary factors of the growing financial disparity from 2010 onward, per the report.
These appreciations generally flowed to senior citizens with real estate, the research shows – intensifying the generational financial disparity.
Generational Financial Divides
The average wealth gap between thirty-somethings and those in their early 60s grew by more than 100% in inflation-adjusted terms, from £135k in the mid-2000s, to £310k.
Regional Differences
Additionally, there were stark regional variations, with the median value of net worth in 2020-22 reaching 290 thousand pounds in south-east England, where property prices have typically increased quickly, versus 110 thousand pounds in the northeastern region.
Pandemic Period Effects
Amid the health crisis, when numerous employees were protected by the government-supported job retention program, and Covid shutdowns limited opportunities for spending, the data shows many households were capable of accumulating, growing their net worth.
Higher-income households performed significantly better, nevertheless. "The median home in the bottom income bracket saw their liquid savings rise by merely £80 throughout the health crisis (from 2019 to 2022), broadly the same as the two years pre-pandemic. Conversely, the typical family in the highest income quintile saw their available funds increase by £4,200," the report finds.
