Per fresh research, the median worker in the UK would need half a century of salary to reach the financial standing of the richest 10% of the population.
Growing Economic Disparity Through the Years
This research reviewed net worth data covering the Covid pandemic period and found that back in the pre-financial crisis era, it would have needed nearly four decades of typical employment income to join the richest segment of the wealth distribution.
A senior economist associated with the report observed: "Wealth gaps in Britain are currently so significant that a regular employee accumulating their complete salary during their working years would continue to be incapable to attain the highest level of the economic scale."
Assessing the Financial Disparity
The study revealed that the gap between the net worth of the average person and someone in the wealthiest decile was £1 million in 2006-08, but had widened to £1.3 million in inflation-adjusted terms by 2020-22.
The analyst further stated: "These differences are particularly worrying as financial progression in Britain is restricted – individuals who begin life well-off tend to stay wealthy, and conversely applies."
Comparative Financial Divide
Despite the wealth gap growing in specific figures, the portion of overall assets in the UK held by the wealthiest families – known as "comparative financial divide" – has been "mostly consistent since the eighties," according to the analysis.
During this period, overall assets in the UK surged from triple the annual GDP, to approximately 7.5x.
Factors of Economic Disparity
Termed "automatic" increases, through rising house prices and adjustments to retirement fund assessments, were the key contributors of the growing financial disparity from 2010 onward, per the report.
These appreciations tended to accrue to senior citizens with real estate, the research shows – intensifying the generational financial disparity.
Intergenerational Economic Gaps
The average wealth gap between individuals aged 30-34 and people aged 60-64 increased over twofold in inflation-adjusted terms, from 135 thousand pounds in pre-financial crisis, to £310,000.
Area-Based Variations
There were also significant regional variations, with the typical amount of wealth in 2020-22 amounting to £290,000 in the southeastern region, where property prices have generally grown substantially, as opposed to £110k in the north-east.
Pandemic Period Consequences
Amid the health crisis, when millions of workers were supported by the taxpayer-backed furlough scheme, and pandemic lockdowns limited opportunities for spending, the data shows many households were able to save, increasing their wealth.
Higher-income households performed significantly better, however. "The average household in the bottom income bracket saw their available funds rise by merely £80 during the COVID years (2019-20 to 2021-22), roughly identical to the two years pre-pandemic. In contrast, the typical family in the wealthiest fifth saw their liquid savings grow by 4,200 pounds," the report finds.
