Per fresh study, the typical employee in the UK would have to work 52 years' worth of salary to achieve the net worth of the wealthiest 10% of the population.
Widening Financial Divide Across Decades
The analysis reviewed net worth data from the recent health crisis years and determined that back in 2006-08, it would have required 38 years of typical employment income to join the richest segment of the economic ladder.
An economic expert involved with the study observed: "Economic disparities in Britain are now so large that a typical full-time employee accumulating their complete salary across their entire working life would still not be able to reach the top of the financial hierarchy."
Measuring the Wealth Divide
The analysis found that the disparity between the wealth of the median citizen and a person belonging to the richest segment was £1 million in the pre-crisis period, but had increased to 1.3 million pounds in actual value by recent times.
The researcher further stated: "These disparities are doubly concerning as wealth mobility in Britain is restricted – individuals who begin life wealthy tend to continue being rich, and conversely applies."
Relative Wealth Inequality
Although the wealth gap expanding in absolute terms, the share of overall assets in the UK owned by the richest households – termed "comparative financial divide" – has been "largely unchanged since the 1980s," as stated in the analysis.
During this period, overall assets in the UK surged from thrice the annual GDP, to nearly seven and a half times.
Contributors of Financial Divide
So-called "passive" increases, via growing real estate costs and changes in pension valuations, were the main drivers of the growing financial disparity since 2010, as stated in the study.
These appreciations tended to accrue to older, property-owning households, the analysis reveals – intensifying the age-based economic gap.
Age-Based Financial Divides
The average wealth gap between individuals aged 30-34 and sixty-somethings grew by more than 100% in real terms, from 135 thousand pounds in 2006-08, to 310 thousand pounds.
Area-Based Differences
There were also pronounced regional variations, with the typical amount of wealth in the pandemic period standing at £290,000 in the SE of England, where housing costs have tended to rise rapidly, compared with £110,000 in the north-east.
Pandemic Period Impact
During the pandemic, when numerous employees were supported by the taxpayer-backed furlough scheme, and health crisis restrictions curtailed consumption options, the data shows countless homes were capable of accumulating, enhancing their financial standing.
Higher-income households fared much better, nevertheless. "The median home in the poorest fifth saw their cash reserves increase by just £80 during the COVID years (2019-20 to 2021-22), broadly the same as the pre-crisis period. On the other hand, the average household in the wealthiest fifth saw their liquid savings grow by 4,200 pounds," the report finds.
