Based on new analysis, the average earner in the UK would need 52 years' worth of earnings to reach the financial standing of the most affluent 10% nationwide.
Widening Financial Divide Through the Years
The study examined financial assets data from the recent health crisis years and determined that back in the pre-financial crisis era, it would have needed 38 years' worth of average worker salary to enter the top 10th of the economic ladder.
A senior economist involved with the analysis observed: "Financial divides in Britain are currently so significant that a regular employee accumulating their complete salary throughout their career would still not be able to reach the top of the economic scale."
Quantifying the Economic Gap
The study found that the disparity between the net worth of the typical individual and a person belonging to the wealthiest decile was £1 million in the mid-2000s, but had increased to £1.3m in real terms by the pandemic years.
The analyst added: "These gaps are especially alarming as wealth mobility in Britain is restricted – individuals who begin life affluent tend to remain affluent, and vice versa."
Proportional Economic Disparity
Despite the financial disparity growing in specific figures, the share of overall assets in the UK possessed by the richest households – called "relative wealth inequality" – has been "broadly stable since the eighties," per the study.
Over this timeframe, complete net worth in the UK increased dramatically from triple the annual GDP, to nearly seven and a half times.
Factors of Economic Disparity
So-called "unearned" appreciation, through increasing property values and variations in pension valuations, were the primary factors of the widening wealth gap since 2010, according to the report.
These appreciations tended to accrue to elderly homeowners, the research shows – exacerbating the age-based economic gap.
Generational Financial Divides
The median economic difference between people in their early 30s and sixty-somethings more than doubled in inflation-adjusted terms, from £135,000 in the mid-2000s, to £310,000.
Regional Differences
There were also stark area-based disparities, with the average level of net worth in 2020-22 amounting to £290k in south-east England, where property prices have generally grown substantially, versus £110k in the north-east.
COVID Era Effects
Amid the health crisis, when millions of workers were protected by the government-supported job retention program, and Covid shutdowns limited opportunities for spending, the statistics indicate countless homes were in a position to set aside money, increasing their wealth.
Higher-income households achieved superior outcomes, nevertheless. "The average household in the poorest fifth saw their cash reserves rise by merely £80 throughout the health crisis (across the pandemic timeframe), approximately equivalent to the pre-crisis period. In contrast, the median home in the top income bracket saw their available funds grow by 4,200 pounds," the report finds.
