Based on recent study, the average earner in the UK would have to work over five decades of salary to achieve the wealth level of the richest 10% of the population.
Widening Wealth Gap Through the Years
The study reviewed financial assets statistics from the recent health crisis years and found that during 2006-08, it would have needed nearly four decades of median full-time earnings to join the richest segment of the financial hierarchy.
A research lead involved with the report observed: "Wealth gaps in Britain are currently so significant that a regular employee setting aside their entire income across their entire working life would still not be able to attain the highest level of the wealth ladder."
Measuring the Financial Disparity
The research discovered that the difference between the assets of the typical individual and someone in the wealthiest decile was £1m in the mid-2000s, but had increased to £1.3m in actual value by recent times.
The analyst further stated: "These differences are especially alarming as economic movement in Britain is restricted – those who commence life well-off tend to continue being rich, and conversely applies."
Relative Wealth Inequality
Despite the economic divide growing in actual numbers, the portion of overall assets in the UK held by the richest households – known as "comparative financial divide" – has been "broadly stable since the 1980s," according to the study.
Throughout these years, total wealth in the UK rose substantially from triple the annual GDP, to almost 7.5 times.
Drivers of Wealth Inequality
So-called "passive" gains, by means of rising house prices and changes in superannuation evaluations, were the key contributors of the expanding economic divide over the past decade, as stated in the study.
These gains typically went to elderly homeowners, the research shows – intensifying the generational financial disparity.
Generational Wealth Disparities
The typical financial disparity between people in their early 30s and sixty-somethings more than doubled in actual value, from 135 thousand pounds in pre-financial crisis, to 310 thousand pounds.
Geographic Differences
Furthermore, the study revealed significant geographic differences, with the average level of net worth in the pandemic period standing at 290 thousand pounds in the southeastern region, where property prices have tended to rise rapidly, as opposed to 110 thousand pounds in the northeastern region.
Pandemic Period Impact
Amid the health crisis, when numerous employees were protected by the taxpayer-backed furlough scheme, and health crisis restrictions curtailed consumption options, the data shows countless homes were able to save, growing their net worth.
Wealthier families performed significantly better, however. "The typical family in the bottom income bracket saw their cash reserves increase by just £80 over the pandemic period (2019-20 to 2021-22), broadly the same as the two years pre-pandemic. On the other hand, the median home in the top income bracket saw their liquid savings grow by 4,200 pounds," the report finds.
