Per new research, the average earner in the UK would have to work half a century of income to attain the wealth level of the richest 10% nationwide.
Growing Wealth Gap Through the Years
This research examined net worth statistics covering the Covid pandemic period and found that back in the mid-2000s, it would have needed 38 years' worth of typical employment income to reach the wealthiest decile of the economic ladder.
A senior economist part of the report commented: "Wealth gaps in Britain are now so large that a regular employee accumulating their complete salary throughout their career would still not be able to attain the highest level of the economic scale."
Measuring the Financial Disparity
The analysis found that the disparity between the assets of the typical individual and an individual in the richest segment was £1 million in the pre-crisis period, but had increased to £1.3m in inflation-adjusted terms by 2020-22.
The economist continued: "These disparities are especially alarming as financial progression in Britain is restricted – people that start life well-off tend to remain affluent, and the opposite holds true."
Proportional Economic Disparity
Even with the financial disparity growing in actual numbers, the percentage of total wealth in the UK owned by the wealthiest families – termed "proportional economic disparity" – has been "broadly stable since the 1980s era," per the research.
Throughout these years, total wealth in the UK increased dramatically from triple the yearly economic output, to approximately 7.5x.
Factors of Wealth Inequality
Referred to as "passive" appreciation, through rising house prices and variations in retirement fund assessments, were the key contributors of the expanding economic divide from 2010 onward, according to the study.
These gains generally flowed to senior citizens with real estate, the research shows – exacerbating the age-based economic gap.
Generational Economic Gaps
The typical financial disparity between individuals aged 30-34 and those in their early 60s grew by more than 100% in actual value, from £135,000 in 2006-08, to 310 thousand pounds.
Regional Disparities
There were also stark regional variations, with the median value of net worth in recent years reaching 290 thousand pounds in the SE of England, where real estate values have generally grown substantially, as opposed to £110k in the NE of England.
Health Crisis Years Effects
During the pandemic, when numerous employees were covered under the public-funded employment protection, and pandemic lockdowns limited opportunities for spending, the data shows many households were able to save, increasing their wealth.
Wealthier families performed significantly better, however. "The average household in the bottom income bracket saw their cash reserves increase by just £80 throughout the health crisis (2019-20 to 2021-22), approximately equivalent to the two years pre-pandemic. On the other hand, the median home in the wealthiest fifth saw their cash reserves increase by £4,200," the analysis concludes.
