Per new analysis, the typical employee in the UK would have to work half a century of salary to reach the wealth level of the most affluent 10% nationwide.
Growing Financial Divide Through the Years
The study analyzed financial assets data from the 2020-22 timeframe and determined that in the mid-2000s, it would have taken nearly four decades of median full-time earnings to reach the wealthiest decile of the financial hierarchy.
A senior economist part of the report commented: "Economic disparities in Britain are currently so significant that a regular employee setting aside their entire income throughout their career would continue to be incapable to achieve the peak of the wealth ladder."
Assessing the Economic Gap
The research revealed that the disparity between the wealth of the typical individual and a person belonging to the wealthiest decile was one million pounds in the pre-crisis period, but had expanded to 1.3 million pounds in inflation-adjusted terms by 2020-22.
The economist added: "These disparities are particularly worrying as wealth mobility in Britain is restricted – individuals who begin life wealthy tend to stay wealthy, and vice versa."
Relative Wealth Inequality
Even with the wealth gap widening in specific figures, the share of complete net worth in the UK possessed by the richest households – termed "proportional economic disparity" – has been "largely unchanged since the eighties," according to the study.
During this period, overall assets in the UK rose substantially from triple the annual GDP, to almost 7.5 times.
Drivers of Financial Divide
So-called "automatic" appreciation, by means of growing real estate costs and variations in retirement fund assessments, were the main drivers of the widening wealth gap since 2010, per the study.
These appreciations generally flowed to older, property-owning households, the study demonstrates – exacerbating the generational financial disparity.
Intergenerational Economic Gaps
The typical financial disparity between individuals aged 30-34 and those in their early 60s grew by more than 100% in real terms, from £135,000 in the mid-2000s, to £310,000.
Area-Based Disparities
There were also pronounced regional variations, with the typical amount of net worth in the pandemic period amounting to £290,000 in south-east England, where housing costs have typically increased quickly, as opposed to 110 thousand pounds in the northeastern region.
Pandemic Period Effects
Throughout the COVID period, when millions of workers were supported by the taxpayer-backed furlough scheme, and health crisis restrictions limited opportunities for spending, the data shows countless homes were capable of accumulating, increasing their wealth.
Wealthier families achieved superior outcomes, nevertheless. "The average household in the poorest fifth saw their available funds grow by only eighty pounds during the COVID years (from 2019 to 2022), approximately equivalent to the two years pre-pandemic. In contrast, the typical family in the wealthiest fifth saw their available funds grow by 4,200 pounds," the study reveals.
