According to recent study, the average earner in the UK would have to work 52 years' worth of income to achieve the wealth level of the richest 10% of the population.
Expanding Economic Disparity Over Time
This research analyzed net worth statistics from the Covid pandemic period and discovered that in the mid-2000s, it would have required 38 years' worth of typical employment income to enter the wealthiest decile of the financial hierarchy.
A senior economist part of the report commented: "Financial divides in Britain are presently so substantial that a regular employee saving all their earnings during their working years would still not be able to attain the highest level of the economic scale."
Assessing the Economic Gap
The study revealed that the difference between the net worth of the average person and an individual in the top 10% was £1 million in the mid-2000s, but had widened to 1.3 million pounds in actual value by the pandemic years.
The analyst further stated: "These gaps are especially alarming as wealth mobility in Britain is restricted – those who commence life affluent tend to continue being rich, and conversely applies."
Proportional Economic Disparity
Despite the financial disparity growing in absolute terms, the percentage of overall assets in the UK owned by the most affluent homes – termed "relative wealth inequality" – has been "broadly stable since the 1980s era," according to the analysis.
During this period, complete net worth in the UK surged from thrice the annual GDP, to almost 7.5 times.
Factors of Financial Divide
Termed "automatic" gains, through rising house prices and changes in retirement fund assessments, were the main drivers of the expanding economic divide from 2010 onward, according to the analysis.
These appreciations tended to accrue to older, property-owning households, the research shows – exacerbating the age-based economic gap.
Intergenerational Economic Gaps
The average wealth gap between individuals aged 30-34 and sixty-somethings grew by more than 100% in inflation-adjusted terms, from 135 thousand pounds in pre-financial crisis, to £310k.
Regional Disparities
Additionally, there were significant area-based disparities, with the average level of wealth in the pandemic period amounting to 290 thousand pounds in south-east England, where housing costs have typically increased quickly, versus £110,000 in the north-east.
Pandemic Period Effects
Amid the health crisis, when millions of workers were protected by the government-supported job retention program, and health crisis restrictions limited opportunities for spending, the data shows many households were in a position to set aside money, increasing their wealth.
Higher-income households performed significantly better, however. "The median home in the lowest-income quintile saw their cash reserves grow by only eighty pounds over the pandemic period (2019-20 to 2021-22), roughly identical to the pre-crisis period. On the other hand, the typical family in the wealthiest fifth saw their liquid savings increase by £4,200," the report finds.
