According to new study, the average employee in the UK would need 52 years' worth of income to reach the wealth level of the wealthiest 10% in the country.
Expanding Economic Disparity Across Decades
The analysis reviewed financial assets data covering the Covid pandemic period and determined that back in the mid-2000s, it would have needed 38 years' worth of median full-time earnings to join the wealthiest decile of the wealth distribution.
A research lead involved with the analysis observed: "Economic disparities in Britain are now so large that a regular employee accumulating their complete salary during their working years would still not be able to reach the top of the economic scale."
Measuring the Wealth Divide
The study revealed that the gap between the wealth of the average person and an individual in the richest segment was £1m in 2006-08, but had widened to £1.3 million in inflation-adjusted terms by 2020-22.
The analyst further stated: "These gaps are particularly worrying as financial progression in Britain is restricted – people that start life well-off tend to stay wealthy, and conversely applies."
Relative Wealth Inequality
Despite the economic divide growing in absolute terms, the share of complete net worth in the UK possessed by the wealthiest families – known as "comparative financial divide" – has been "mostly consistent since the eighties," according to the analysis.
Throughout these years, total wealth in the UK rose substantially from three times the annual GDP, to nearly seven and a half times.
Contributors of Economic Disparity
Termed "passive" gains, via rising house prices and adjustments to superannuation evaluations, were the primary factors of the expanding economic divide since 2010, according to the analysis.
These appreciations generally flowed to elderly homeowners, the research shows – intensifying the age-based economic gap.
Generational Wealth Disparities
The average wealth gap between individuals aged 30-34 and those in their early 60s increased over twofold in real terms, from £135k in the mid-2000s, to 310 thousand pounds.
Area-Based Differences
Additionally, there were pronounced geographic differences, with the average level of wealth in 2020-22 reaching £290k in south-east England, where property prices have generally grown substantially, compared with 110 thousand pounds in the north-east.
Health Crisis Years Impact
Amid the health crisis, when millions of workers were protected by the taxpayer-backed furlough scheme, and health crisis restrictions limited opportunities for spending, the statistics indicate many households were in a position to set aside money, growing their net worth.
More affluent homes achieved superior outcomes, nevertheless. "The median home in the bottom income bracket saw their available funds grow by only eighty pounds throughout the health crisis (across the pandemic timeframe), approximately equivalent to the two years pre-pandemic. On the other hand, the typical family in the wealthiest fifth saw their available funds grow by 4,200 pounds," the report finds.
