Per fresh analysis, the average worker in the UK would have to work over five decades of income to reach the wealth level of the richest 10% nationwide.
Growing Financial Divide Over Time
This research reviewed financial assets data from the Covid pandemic period and determined that back in 2006-08, it would have taken 38 years' worth of average worker salary to reach the top 10th of the financial hierarchy.
An economic expert associated with the report commented: "Wealth gaps in Britain are presently so substantial that a regular employee saving all their earnings throughout their career would remain unable to achieve the peak of the wealth ladder."
Measuring the Financial Disparity
The analysis revealed that the disparity between the net worth of the typical individual and a person belonging to the richest segment was £1m in the mid-2000s, but had expanded to £1.3 million in real terms by the pandemic years.
The researcher continued: "These differences are doubly concerning as financial progression in Britain is restricted – individuals who begin life well-off tend to remain affluent, and the opposite holds true."
Proportional Economic Disparity
Although the economic divide growing in absolute terms, the portion of complete net worth in the UK held by the richest households – known as "proportional economic disparity" – has been "mostly consistent since the 1980s era," per the research.
Throughout these years, complete net worth in the UK increased dramatically from three times the gross domestic product, to nearly seven and a half times.
Factors of Economic Disparity
So-called "unearned" increases, through growing real estate costs and variations in retirement fund assessments, were the primary factors of the growing financial disparity over the past decade, per the study.
These appreciations typically went to older, property-owning households, the research shows – worsening the age-based economic gap.
Intergenerational Economic Gaps
The typical financial disparity between people in their early 30s and sixty-somethings increased over twofold in real terms, from 135 thousand pounds in the mid-2000s, to £310k.
Regional Differences
There were also stark geographic differences, with the typical amount of wealth in the pandemic period amounting to 290 thousand pounds in the SE of England, where property prices have typically increased quickly, versus £110k in the northeastern region.
Pandemic Period Impact
Amid the health crisis, when millions of workers were supported by the public-funded employment protection, and pandemic lockdowns curtailed consumption options, the statistics indicate countless homes were able to save, enhancing their financial standing.
Higher-income households performed significantly better, however. "The typical family in the poorest fifth saw their cash reserves rise by merely £80 over the pandemic period (2019-20 to 2021-22), roughly identical to the pre-crisis period. In contrast, the average household in the top income bracket saw their available funds rise by £4,200," the report finds.
