Based on fresh research, the median worker in the UK would require 52 years' worth of income to attain the net worth of the most affluent 10% nationwide.
Widening Wealth Gap Across Decades
The analysis reviewed wealth distribution data covering the recent health crisis years and found that back in the pre-financial crisis era, it would have taken 38 years' worth of typical employment income to join the richest segment of the wealth distribution.
An economic expert associated with the analysis commented: "Wealth gaps in Britain are now so large that a typical full-time employee saving all their earnings during their working years would remain unable to achieve the peak of the economic scale."
Measuring the Wealth Divide
The analysis found that the difference between the assets of the typical individual and a person belonging to the wealthiest decile was £1m in the pre-crisis period, but had widened to £1.3 million in inflation-adjusted terms by the pandemic years.
The analyst added: "These gaps are doubly concerning as financial progression in Britain is restricted – people that start life wealthy tend to remain affluent, and conversely applies."
Proportional Economic Disparity
Although the financial disparity growing in absolute terms, the share of total wealth in the UK held by the richest households – known as "relative wealth inequality" – has been "broadly stable since the 1980s," according to the study.
Throughout these years, total wealth in the UK surged from thrice the annual GDP, to nearly seven and a half times.
Factors of Wealth Inequality
Referred to as "unearned" appreciation, via rising house prices and adjustments to superannuation evaluations, were the primary factors of the expanding economic divide since 2010, as stated in the analysis.
These gains typically went to elderly homeowners, the analysis reveals – worsening the intergenerational wealth divide.
Intergenerational Financial Divides
The median economic difference between thirty-somethings and those in their early 60s increased over twofold in inflation-adjusted terms, from 135 thousand pounds in the mid-2000s, to £310k.
Regional Variations
Additionally, there were stark regional variations, with the typical amount of wealth in 2020-22 standing at £290,000 in the SE of England, where property prices have tended to rise rapidly, compared with 110 thousand pounds in the NE of England.
Pandemic Period Consequences
Throughout the COVID period, when millions of workers were protected by the taxpayer-backed furlough scheme, and Covid shutdowns limited opportunities for spending, the information reveals countless homes were in a position to set aside money, enhancing their financial standing.
Higher-income households achieved superior outcomes, however. "The typical family in the poorest fifth saw their available funds increase by just £80 over the pandemic period (across the pandemic timeframe), approximately equivalent to the 24 months before COVID. Conversely, the average household in the highest income quintile saw their available funds rise by £4,200," the analysis concludes.
