Per new study, the average employee in the UK would require over five decades of salary to attain the net worth of the richest 10% nationwide.
Widening Financial Divide Over Time
The analysis reviewed financial assets information from the 2020-22 timeframe and discovered that during the mid-2000s, it would have required 38 years of median full-time earnings to join the richest segment of the economic ladder.
A senior economist involved with the report observed: "Wealth gaps in Britain are currently so significant that a typical full-time employee saving all their earnings across their entire working life would continue to be incapable to attain the highest level of the financial hierarchy."
Assessing the Economic Gap
The research discovered that the gap between the wealth of the median citizen and a person belonging to the wealthiest decile was £1 million in 2006-08, but had expanded to 1.3 million pounds in real terms by 2020-22.
The researcher continued: "These gaps are doubly concerning as economic movement in Britain is limited – individuals who begin life wealthy tend to stay wealthy, and conversely applies."
Relative Wealth Inequality
Although the wealth gap growing in actual numbers, the share of total wealth in the UK owned by the richest households – termed "relative wealth inequality" – has been "broadly stable since the eighties," according to the research.
Over this timeframe, total wealth in the UK surged from three times the gross domestic product, to nearly seven and a half times.
Contributors of Wealth Inequality
So-called "passive" gains, via growing real estate costs and variations in pension valuations, were the key contributors of the expanding economic divide over the past decade, according to the analysis.
These appreciations generally flowed to elderly homeowners, the analysis reveals – intensifying the age-based economic gap.
Age-Based Financial Divides
The typical financial disparity between people in their early 30s and those in their early 60s grew by more than 100% in inflation-adjusted terms, from 135 thousand pounds in the mid-2000s, to £310k.
Regional Disparities
There were also pronounced geographic differences, with the average level of net worth in recent years amounting to £290k in the southeastern region, where property prices have generally grown substantially, compared with £110,000 in the northeastern region.
Pandemic Period Consequences
Throughout the COVID period, when millions of workers were supported by the public-funded employment protection, and health crisis restrictions curtailed consumption options, the statistics indicate many households were capable of accumulating, increasing their wealth.
Higher-income households performed significantly better, however. "The typical family in the bottom income bracket saw their cash reserves grow by only eighty pounds during the COVID years (across the pandemic timeframe), roughly identical to the two years pre-pandemic. On the other hand, the average household in the top income bracket saw their liquid savings rise by £4,200," the analysis concludes.
