Per new research, the median employee in the UK would need half a century of income to attain the financial standing of the wealthiest 10% nationwide.
Widening Wealth Gap Through the Years
The analysis examined net worth information from the 2020-22 timeframe and found that back in the mid-2000s, it would have required 38 years of average worker salary to enter the richest segment of the wealth distribution.
A research lead associated with the study commented: "Wealth gaps in Britain are presently so substantial that a typical full-time employee setting aside their entire income across their entire working life would continue to be incapable to achieve the peak of the economic scale."
Assessing the Economic Gap
The analysis revealed that the difference between the wealth of the median citizen and a person belonging to the top 10% was one million pounds in the pre-crisis period, but had widened to £1.3m in inflation-adjusted terms by 2020-22.
The analyst further stated: "These disparities are especially alarming as wealth mobility in Britain is limited – those who commence life well-off tend to remain affluent, and conversely applies."
Relative Wealth Inequality
Although the economic divide widening in actual numbers, the portion of total wealth in the UK held by the most affluent homes – termed "relative wealth inequality" – has been "largely unchanged since the eighties," per the analysis.
Over this timeframe, overall assets in the UK rose substantially from triple the gross domestic product, to nearly seven and a half times.
Drivers of Economic Disparity
So-called "passive" increases, via increasing property values and changes in retirement fund assessments, were the primary factors of the growing financial disparity from 2010 onward, per the analysis.
These appreciations tended to accrue to older, property-owning households, the analysis reveals – exacerbating the generational financial disparity.
Intergenerational Wealth Disparities
The median economic difference between individuals aged 30-34 and those in their early 60s grew by more than 100% in inflation-adjusted terms, from £135,000 in 2006-08, to 310 thousand pounds.
Area-Based Variations
Furthermore, the study revealed pronounced area-based disparities, with the average level of assets in recent years standing at £290k in south-east England, where property prices have generally grown substantially, as opposed to 110 thousand pounds in the north-east.
COVID Era Effects
Amid the health crisis, when millions of workers were protected by the public-funded employment protection, and pandemic lockdowns curtailed consumption options, the data shows many households were capable of accumulating, increasing their wealth.
More affluent homes fared much better, though. "The average household in the bottom income bracket saw their liquid savings grow by only eighty pounds during the COVID years (from 2019 to 2022), broadly the same as the 24 months before COVID. On the other hand, the average household in the highest income quintile saw their liquid savings increase by £4,200," the study reveals.
