Based on fresh research, the average employee in the UK would require over five decades of earnings to attain the wealth level of the richest 10% of the population.
Expanding Economic Disparity Over Time
The analysis examined net worth data from the recent health crisis years and determined that back in 2006-08, it would have needed 38 years of typical employment income to join the wealthiest decile of the economic ladder.
An economic expert associated with the study stated: "Financial divides in Britain are presently so substantial that a typical full-time employee saving all their earnings throughout their career would continue to be incapable to attain the highest level of the financial hierarchy."
Assessing the Financial Disparity
The research found that the gap between the net worth of the average person and someone in the top 10% was £1 million in the pre-crisis period, but had increased to £1.3 million in inflation-adjusted terms by 2020-22.
The economist further stated: "These gaps are especially alarming as financial progression in Britain is limited – individuals who begin life affluent tend to remain affluent, and conversely applies."
Proportional Economic Disparity
Although the financial disparity expanding in actual numbers, the share of complete net worth in the UK possessed by the wealthiest families – known as "proportional economic disparity" – has been "largely unchanged since the 1980s era," as stated in the analysis.
Throughout these years, total wealth in the UK increased dramatically from three times the gross domestic product, to almost 7.5 times.
Drivers of Financial Divide
So-called "passive" gains, through increasing property values and adjustments to pension valuations, were the primary factors of the widening wealth gap from 2010 onward, per the analysis.
These gains typically went to senior citizens with real estate, the study demonstrates – worsening the intergenerational wealth divide.
Generational Economic Gaps
The median economic difference between people in their early 30s and people aged 60-64 increased over twofold in inflation-adjusted terms, from £135k in pre-financial crisis, to £310,000.
Geographic Variations
Additionally, there were significant regional variations, with the typical amount of assets in 2020-22 reaching £290k in the SE of England, where housing costs have tended to rise rapidly, compared with 110 thousand pounds in the northeastern region.
Health Crisis Years Consequences
Throughout the COVID period, when millions of workers were protected by the public-funded employment protection, and pandemic lockdowns reduced expenditure possibilities, the data shows numerous families were able to save, increasing their wealth.
Higher-income households performed significantly better, however. "The median home in the poorest fifth saw their liquid savings rise by merely £80 over the pandemic period (across the pandemic timeframe), roughly identical to the two years pre-pandemic. In contrast, the median home in the top income bracket saw their cash reserves increase by £4,200," the analysis concludes.
