According to fresh analysis, the average worker in the UK would require half a century of income to reach the financial standing of the wealthiest 10% of the population.
Widening Economic Disparity Across Decades
This research examined wealth distribution statistics covering the Covid pandemic period and found that back in 2006-08, it would have taken 38 years of average worker salary to enter the richest segment of the wealth distribution.
A research lead associated with the report commented: "Financial divides in Britain are now so large that a typical full-time employee accumulating their complete salary during their working years would remain unable to achieve the peak of the wealth ladder."
Assessing the Wealth Divide
The study revealed that the disparity between the assets of the median citizen and a person belonging to the wealthiest decile was £1 million in the pre-crisis period, but had expanded to 1.3 million pounds in inflation-adjusted terms by recent times.
The analyst continued: "These gaps are particularly worrying as wealth mobility in Britain is low – people that start life wealthy tend to continue being rich, and conversely applies."
Proportional Economic Disparity
Despite the wealth gap expanding in specific figures, the percentage of total wealth in the UK held by the wealthiest families – termed "proportional economic disparity" – has been "largely unchanged since the eighties," as stated in the research.
Throughout these years, complete net worth in the UK rose substantially from triple the gross domestic product, to approximately 7.5x.
Drivers of Financial Divide
Termed "unearned" gains, via increasing property values and changes in superannuation evaluations, were the primary factors of the expanding economic divide over the past decade, per the report.
These gains generally flowed to older, property-owning households, the analysis reveals – worsening the age-based economic gap.
Age-Based Wealth Disparities
The average wealth gap between thirty-somethings and sixty-somethings grew by more than 100% in inflation-adjusted terms, from 135 thousand pounds in the mid-2000s, to £310,000.
Geographic Disparities
Additionally, there were pronounced geographic differences, with the average level of assets in 2020-22 amounting to 290 thousand pounds in the southeastern region, where housing costs have tended to rise rapidly, as opposed to £110k in the north-east.
Pandemic Period Effects
Throughout the COVID period, when millions of workers were covered under the public-funded employment protection, and health crisis restrictions limited opportunities for spending, the information reveals many households were able to save, increasing their wealth.
Wealthier families achieved superior outcomes, however. "The typical family in the poorest fifth saw their available funds increase by just £80 throughout the health crisis (2019-20 to 2021-22), roughly identical to the two years pre-pandemic. On the other hand, the median home in the top income bracket saw their available funds rise by £4,200," the analysis concludes.
