Based on fresh research, the average earner in the UK would have to work half a century of salary to attain the wealth level of the most affluent 10% nationwide.
Expanding Financial Divide Across Decades
This research examined net worth data covering the Covid pandemic period and determined that in 2006-08, it would have taken 38 years' worth of average worker salary to reach the richest segment of the economic ladder.
A research lead associated with the analysis observed: "Wealth gaps in Britain are now so large that a typical full-time employee saving all their earnings during their working years would remain unable to achieve the peak of the economic scale."
Measuring the Wealth Divide
The research revealed that the disparity between the net worth of the median citizen and an individual in the richest segment was one million pounds in the pre-crisis period, but had widened to £1.3m in real terms by 2020-22.
The researcher continued: "These disparities are particularly worrying as wealth mobility in Britain is restricted – those who commence life wealthy tend to remain affluent, and the opposite holds true."
Relative Wealth Inequality
Although the financial disparity expanding in absolute terms, the percentage of complete net worth in the UK held by the richest households – called "proportional economic disparity" – has been "largely unchanged since the 1980s," according to the research.
Over this timeframe, overall assets in the UK surged from three times the annual GDP, to approximately 7.5x.
Contributors of Economic Disparity
Termed "unearned" increases, via increasing property values and adjustments to retirement fund assessments, were the key contributors of the growing financial disparity over the past decade, per the report.
These gains generally flowed to senior citizens with real estate, the analysis reveals – worsening the generational financial disparity.
Generational Economic Gaps
The average wealth gap between individuals aged 30-34 and people aged 60-64 increased over twofold in inflation-adjusted terms, from £135,000 in 2006-08, to £310k.
Area-Based Variations
There were also significant area-based disparities, with the median value of net worth in the pandemic period standing at £290,000 in the southeastern region, where housing costs have generally grown substantially, compared with £110k in the northeastern region.
Health Crisis Years Effects
Throughout the COVID period, when countless laborers were supported by the taxpayer-backed furlough scheme, and health crisis restrictions curtailed consumption options, the statistics indicate many households were capable of accumulating, enhancing their financial standing.
Wealthier families fared much better, however. "The average household in the poorest fifth saw their liquid savings grow by only eighty pounds over the pandemic period (2019-20 to 2021-22), roughly identical to the 24 months before COVID. Conversely, the median home in the highest income quintile saw their available funds increase by £4,200," the analysis concludes.
