Per new analysis, the average worker in the UK would need half a century of income to achieve the net worth of the most affluent 10% in the country.
Widening Economic Disparity Over Time
This research examined net worth data covering the recent health crisis years and found that during the mid-2000s, it would have needed 38 years of average worker salary to reach the richest segment of the economic ladder.
A senior economist associated with the analysis commented: "Economic disparities in Britain are currently so significant that a average worker saving all their earnings throughout their career would continue to be incapable to achieve the peak of the financial hierarchy."
Quantifying the Economic Gap
The study revealed that the disparity between the assets of the median citizen and an individual in the wealthiest decile was one million pounds in 2006-08, but had widened to £1.3m in real terms by 2020-22.
The analyst added: "These gaps are especially alarming as financial progression in Britain is limited – individuals who begin life affluent tend to stay wealthy, and the opposite holds true."
Proportional Economic Disparity
Although the economic divide expanding in specific figures, the portion of overall assets in the UK held by the richest households – known as "comparative financial divide" – has been "mostly consistent since the 1980s era," per the research.
Over this timeframe, complete net worth in the UK surged from triple the annual GDP, to almost 7.5 times.
Drivers of Wealth Inequality
Termed "passive" gains, by means of increasing property values and adjustments to pension valuations, were the primary factors of the widening wealth gap since 2010, according to the study.
These appreciations generally flowed to senior citizens with real estate, the study demonstrates – worsening the intergenerational wealth divide.
Age-Based Financial Divides
The average wealth gap between thirty-somethings and people aged 60-64 grew by more than 100% in inflation-adjusted terms, from 135 thousand pounds in pre-financial crisis, to £310k.
Area-Based Differences
Additionally, there were pronounced area-based disparities, with the typical amount of net worth in recent years reaching £290,000 in the southeastern region, where real estate values have tended to rise rapidly, versus 110 thousand pounds in the NE of England.
Health Crisis Years Consequences
Throughout the COVID period, when millions of workers were protected by the public-funded employment protection, and health crisis restrictions curtailed consumption options, the data shows many households were capable of accumulating, enhancing their financial standing.
More affluent homes performed significantly better, though. "The median home in the lowest-income quintile saw their liquid savings grow by only eighty pounds throughout the health crisis (2019-20 to 2021-22), roughly identical to the two years pre-pandemic. In contrast, the median home in the wealthiest fifth saw their cash reserves grow by 4,200 pounds," the report finds.
