Per new analysis, the median worker in the UK would have to work half a century of salary to reach the wealth level of the richest 10% of the population.
Expanding Economic Disparity Across Decades
This research reviewed financial assets statistics including the 2020-22 timeframe and found that back in 2006-08, it would have required 38 years of typical employment income to enter the wealthiest decile of the financial hierarchy.
A research lead involved with the analysis commented: "Economic disparities in Britain are currently so significant that a regular employee saving all their earnings during their working years would still not be able to attain the highest level of the wealth ladder."
Measuring the Wealth Divide
The analysis discovered that the gap between the assets of the median citizen and someone in the richest segment was £1m in 2006-08, but had expanded to £1.3 million in real terms by 2020-22.
The researcher added: "These disparities are particularly worrying as wealth mobility in Britain is low – those who commence life wealthy tend to continue being rich, and conversely applies."
Comparative Financial Divide
Although the financial disparity expanding in absolute terms, the percentage of overall assets in the UK owned by the wealthiest families – called "relative wealth inequality" – has been "mostly consistent since the 1980s era," per the analysis.
Throughout these years, total wealth in the UK increased dramatically from thrice the yearly economic output, to almost 7.5 times.
Drivers of Economic Disparity
So-called "unearned" gains, via increasing property values and variations in retirement fund assessments, were the key contributors of the expanding economic divide from 2010 onward, as stated in the study.
These increases generally flowed to older, property-owning households, the study demonstrates – exacerbating the generational financial disparity.
Age-Based Financial Divides
The average wealth gap between thirty-somethings and sixty-somethings more than doubled in inflation-adjusted terms, from £135k in the mid-2000s, to 310 thousand pounds.
Area-Based Differences
Additionally, there were significant geographic differences, with the median value of wealth in recent years standing at £290k in the SE of England, where housing costs have typically increased quickly, compared with £110,000 in the NE of England.
Health Crisis Years Effects
Amid the health crisis, when millions of workers were protected by the government-supported job retention program, and pandemic lockdowns reduced expenditure possibilities, the data shows many households were in a position to set aside money, increasing their wealth.
Higher-income households fared much better, however. "The average household in the poorest fifth saw their liquid savings grow by only eighty pounds over the pandemic period (across the pandemic timeframe), broadly the same as the pre-crisis period. On the other hand, the typical family in the wealthiest fifth saw their available funds grow by 4,200 pounds," the study reveals.
