Based on recent study, the average earner in the UK would have to work over five decades of salary to attain the wealth level of the richest 10% of the population.
Expanding Wealth Gap Across Decades
The analysis reviewed financial assets statistics covering the Covid pandemic period and discovered that during the pre-financial crisis era, it would have taken 38 years' worth of average worker salary to join the wealthiest decile of the financial hierarchy.
A senior economist part of the study stated: "Economic disparities in Britain are now so large that a regular employee setting aside their entire income across their entire working life would remain unable to attain the highest level of the economic scale."
Quantifying the Wealth Divide
The analysis found that the gap between the assets of the average person and an individual in the richest segment was £1m in 2006-08, but had widened to 1.3 million pounds in actual value by 2020-22.
The researcher continued: "These differences are doubly concerning as wealth mobility in Britain is low – individuals who begin life wealthy tend to continue being rich, and the opposite holds true."
Comparative Financial Divide
Even with the financial disparity expanding in specific figures, the portion of total wealth in the UK owned by the most affluent homes – known as "proportional economic disparity" – has been "largely unchanged since the 1980s era," as stated in the analysis.
During this period, complete net worth in the UK increased dramatically from three times the gross domestic product, to nearly seven and a half times.
Drivers of Financial Divide
So-called "passive" increases, via increasing property values and adjustments to superannuation evaluations, were the main drivers of the growing financial disparity since 2010, as stated in the analysis.
These gains typically went to senior citizens with real estate, the study demonstrates – exacerbating the generational financial disparity.
Generational Wealth Disparities
The average wealth gap between people in their early 30s and sixty-somethings more than doubled in inflation-adjusted terms, from £135k in the mid-2000s, to £310,000.
Area-Based Disparities
There were also significant regional variations, with the typical amount of net worth in recent years reaching £290k in the southeastern region, where property prices have generally grown substantially, versus £110k in the north-east.
Pandemic Period Consequences
Throughout the COVID period, when countless laborers were supported by the taxpayer-backed furlough scheme, and health crisis restrictions reduced expenditure possibilities, the data shows numerous families were able to save, growing their net worth.
Higher-income households performed significantly better, though. "The average household in the poorest fifth saw their liquid savings increase by just £80 during the COVID years (across the pandemic timeframe), broadly the same as the two years pre-pandemic. In contrast, the average household in the top income bracket saw their liquid savings rise by £4,200," the analysis concludes.
