Per new analysis, the average earner in the UK would require over five decades of earnings to attain the net worth of the wealthiest 10% in the country.
Widening Wealth Gap Across Decades
The analysis analyzed financial assets data covering the 2020-22 timeframe and determined that in 2006-08, it would have required 38 years' worth of median full-time earnings to join the richest segment of the economic ladder.
A senior economist part of the study commented: "Economic disparities in Britain are now so large that a typical full-time employee accumulating their complete salary across their entire working life would continue to be incapable to attain the highest level of the financial hierarchy."
Assessing the Wealth Divide
The analysis found that the difference between the assets of the average person and someone in the wealthiest decile was one million pounds in 2006-08, but had expanded to 1.3 million pounds in real terms by recent times.
The researcher added: "These gaps are particularly worrying as financial progression in Britain is low – those who commence life affluent tend to continue being rich, and vice versa."
Proportional Economic Disparity
Even with the financial disparity widening in specific figures, the portion of total wealth in the UK possessed by the wealthiest families – called "relative wealth inequality" – has been "mostly consistent since the eighties," per the analysis.
During this period, overall assets in the UK increased dramatically from three times the annual GDP, to almost 7.5 times.
Factors of Economic Disparity
Termed "automatic" appreciation, by means of growing real estate costs and adjustments to pension valuations, were the main drivers of the expanding economic divide over the past decade, as stated in the analysis.
These appreciations typically went to elderly homeowners, the analysis reveals – exacerbating the age-based economic gap.
Intergenerational Economic Gaps
The typical financial disparity between individuals aged 30-34 and sixty-somethings increased over twofold in real terms, from £135k in the mid-2000s, to 310 thousand pounds.
Area-Based Variations
Furthermore, the study revealed stark regional variations, with the average level of net worth in the pandemic period amounting to £290k in the southeastern region, where property prices have typically increased quickly, compared with 110 thousand pounds in the NE of England.
Health Crisis Years Effects
Throughout the COVID period, when countless laborers were covered under the public-funded employment protection, and Covid shutdowns curtailed consumption options, the data shows many households were in a position to set aside money, growing their net worth.
More affluent homes performed significantly better, however. "The average household in the poorest fifth saw their liquid savings rise by merely £80 over the pandemic period (across the pandemic timeframe), roughly identical to the 24 months before COVID. In contrast, the typical family in the highest income quintile saw their cash reserves grow by 4,200 pounds," the analysis concludes.
