According to new study, the average worker in the UK would have to work half a century of salary to attain the wealth level of the wealthiest 10% of the population.
Expanding Wealth Gap Over Time
The analysis analyzed wealth distribution statistics from the recent health crisis years and found that during the pre-financial crisis era, it would have required 38 years of typical employment income to join the richest segment of the wealth distribution.
A senior economist part of the analysis stated: "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 achieve the peak of the economic scale."
Assessing the Wealth Divide
The research found that the disparity between the net worth of the typical individual and someone in the top 10% was one million pounds in the mid-2000s, but had widened to £1.3 million in real terms by recent times.
The researcher added: "These gaps are doubly concerning as wealth mobility in Britain is low – people that start life well-off tend to stay wealthy, and the opposite holds true."
Proportional Economic Disparity
Despite the economic divide expanding in specific figures, the percentage of overall assets in the UK held by the richest households – called "proportional economic disparity" – has been "largely unchanged since the eighties," per the study.
During this period, complete net worth in the UK increased dramatically from thrice the annual GDP, to nearly seven and a half times.
Contributors of Financial Divide
Termed "automatic" appreciation, via growing real estate costs and adjustments to retirement fund assessments, were the main drivers of the expanding economic divide over the past decade, according to the analysis.
These increases generally flowed to senior citizens with real estate, the study demonstrates – worsening the intergenerational wealth divide.
Intergenerational Economic Gaps
The average wealth gap between people in their early 30s and people aged 60-64 more than doubled in actual value, from 135 thousand pounds in 2006-08, to £310k.
Area-Based Disparities
Additionally, there were stark area-based disparities, with the average level of assets in 2020-22 amounting to £290,000 in the southeastern region, where property prices have tended to rise rapidly, versus 110 thousand pounds in the NE of England.
Pandemic Period Effects
Throughout the COVID period, when millions of workers were covered under the public-funded employment protection, and health crisis restrictions limited opportunities for spending, the statistics indicate many households were in a position to set aside money, increasing their wealth.
Higher-income households achieved superior outcomes, nevertheless. "The typical family in the poorest fifth saw their available funds grow by only eighty pounds over the pandemic period (from 2019 to 2022), roughly identical to the 24 months before COVID. Conversely, the median home in the highest income quintile saw their available funds rise by £4,200," the analysis concludes.
