Per new study, the average earner in the UK would need half a century of salary to achieve the wealth level of the wealthiest 10% nationwide.
Growing Financial Divide Through the Years
The analysis reviewed financial assets statistics including the 2020-22 timeframe and discovered that during the pre-financial crisis era, it would have required nearly four decades of average worker salary to join the top 10th of the economic ladder.
A senior economist involved with the study observed: "Wealth gaps in Britain are currently so significant that a regular employee saving all their earnings throughout their career would still not be able to reach the top of the economic scale."
Assessing the Economic Gap
The research found that the difference between the wealth of the typical individual and an individual in the top 10% was £1 million in 2006-08, but had expanded to 1.3 million pounds in inflation-adjusted terms by the pandemic years.
The analyst further stated: "These disparities are especially alarming as wealth mobility in Britain is restricted – individuals who begin life well-off tend to continue being rich, and vice versa."
Proportional Economic Disparity
Although the economic divide expanding in actual numbers, the percentage of overall assets in the UK possessed by the wealthiest families – known as "proportional economic disparity" – has been "broadly stable since the 1980s," per the analysis.
Over this timeframe, complete net worth in the UK surged from triple the yearly economic output, to approximately 7.5x.
Drivers of Economic Disparity
Referred to as "unearned" increases, through rising house prices and adjustments to pension valuations, were the key contributors of the growing financial disparity since 2010, as stated in the report.
These increases typically went to elderly homeowners, the study demonstrates – worsening the generational financial disparity.
Generational Economic Gaps
The average wealth gap between individuals aged 30-34 and those in their early 60s increased over twofold in actual value, from £135,000 in pre-financial crisis, to £310k.
Regional Differences
There were also significant regional variations, with the median value of assets in recent years standing at £290k in south-east England, where real estate values have generally grown substantially, versus £110,000 in the NE of England.
Health Crisis Years Impact
During the pandemic, when millions of workers were protected by the public-funded employment protection, and health crisis restrictions curtailed consumption options, the statistics indicate many households were capable of accumulating, increasing their wealth.
Higher-income households achieved superior outcomes, though. "The average household in the poorest fifth saw their cash reserves rise by merely £80 during the COVID years (across the pandemic timeframe), roughly identical to the 24 months before COVID. In contrast, the median home in the top income bracket saw their cash reserves increase by £4,200," the study reveals.
