According to new analysis, the median worker in the UK would need 52 years' worth of salary to reach the wealth level of the most affluent 10% nationwide.
Growing Wealth Gap Over Time
The analysis reviewed net worth statistics from the Covid pandemic period and found that back in the pre-financial crisis era, it would have required 38 years' worth of median full-time earnings to enter the top 10th of the wealth distribution.
A research lead associated with the analysis observed: "Economic disparities in Britain are presently so substantial that a typical full-time employee setting aside their entire income throughout their career would still not be able to attain the highest level of the wealth ladder."
Quantifying the Financial Disparity
The research discovered that the disparity between the wealth of the average person and someone in the wealthiest decile was one million pounds in the pre-crisis period, but had widened to £1.3m in actual value by the pandemic years.
The researcher continued: "These disparities are particularly worrying as economic movement in Britain is restricted – those who commence life affluent tend to remain affluent, and conversely applies."
Comparative Financial Divide
Even with the wealth gap growing in actual numbers, the share of overall assets in the UK held by the most affluent homes – called "relative wealth inequality" – has been "largely unchanged since the eighties," as stated in the study.
During this period, total wealth in the UK increased dramatically from three times the gross domestic product, to nearly seven and a half times.
Drivers of Financial Divide
Termed "automatic" increases, via rising house prices and variations in pension valuations, were the key contributors of the widening wealth gap over the past decade, according to the report.
These appreciations generally flowed to older, property-owning households, the research shows – worsening the generational financial disparity.
Generational Wealth Disparities
The average wealth gap between people in their early 30s and sixty-somethings grew by more than 100% in inflation-adjusted terms, from 135 thousand pounds in 2006-08, to £310,000.
Regional Disparities
There were also significant area-based disparities, with the average level of wealth in 2020-22 reaching £290,000 in the southeastern region, where property prices have typically increased quickly, as opposed to £110,000 in the NE of England.
Pandemic Period Consequences
Throughout the COVID period, when countless laborers were protected by the government-supported job retention program, and pandemic lockdowns curtailed consumption options, the statistics indicate many households were able to save, enhancing their financial standing.
Wealthier families fared much better, though. "The average household in the poorest fifth saw their cash reserves rise by merely £80 during the COVID years (across the pandemic timeframe), roughly identical to the two years pre-pandemic. Conversely, the typical family in the highest income quintile saw their liquid savings rise by £4,200," the report finds.
