According to fresh analysis, the median worker in the UK would have to work half a century of salary to achieve the net worth of the wealthiest 10% in the country.
Expanding Economic Disparity Across Decades
The study analyzed wealth distribution statistics including the Covid pandemic period and discovered that in the mid-2000s, it would have needed 38 years' worth of typical employment income to enter the richest segment of the financial hierarchy.
A research lead associated with the report observed: "Financial divides in Britain are presently so substantial that a average worker saving all their earnings across their entire working life would continue to be incapable to reach the top of the financial hierarchy."
Measuring the Wealth Divide
The research found that the disparity between the wealth of the median citizen and a person belonging to the richest segment was £1m in the pre-crisis period, but had widened to £1.3m in actual value by 2020-22.
The economist continued: "These gaps are particularly worrying as economic movement in Britain is restricted – individuals who begin life well-off tend to stay wealthy, and vice versa."
Relative Wealth Inequality
Although the wealth gap widening in specific figures, the percentage of complete net worth in the UK possessed by the richest households – known as "comparative financial divide" – has been "mostly consistent since the eighties," per the analysis.
Over this timeframe, overall assets in the UK rose substantially from thrice the annual GDP, to approximately 7.5x.
Drivers of Financial Divide
So-called "automatic" gains, by means of increasing property values and variations in pension valuations, were the primary factors of the growing financial disparity since 2010, as stated in the study.
These gains tended to accrue to senior citizens with real estate, the analysis reveals – worsening the generational financial disparity.
Age-Based Economic Gaps
The average wealth gap between individuals aged 30-34 and those in their early 60s increased over twofold in inflation-adjusted terms, from £135,000 in pre-financial crisis, to £310,000.
Regional Disparities
There were also stark regional variations, with the average level of net worth in the pandemic period standing at £290k in south-east England, where property prices have tended to rise rapidly, as opposed to £110k in the NE of England.
Pandemic Period Consequences
Amid the health crisis, when millions of workers were covered under the public-funded employment protection, and health crisis restrictions curtailed consumption options, the information reveals many households were in a position to set aside money, growing their net worth.
Higher-income households achieved superior outcomes, nevertheless. "The median home in the lowest-income quintile saw their liquid savings rise by merely £80 during the COVID years (across the pandemic timeframe), roughly identical to the pre-crisis period. On the other hand, the typical family in the top income bracket saw their liquid savings grow by 4,200 pounds," the study reveals.
