According to recent study, the median earner in the UK would have to work 52 years' worth of income to reach the net worth of the richest 10% of the population.
Widening Financial Divide Across Decades
The analysis reviewed financial assets statistics covering the Covid pandemic period and found that during 2006-08, it would have needed 38 years of average worker salary to enter the top 10th of the financial hierarchy.
An economic expert part of the study commented: "Wealth gaps in Britain are currently so significant that a regular employee setting aside their entire income throughout their career would continue to be incapable to achieve the peak of the economic scale."
Measuring the Wealth Divide
The study found that the difference between the assets of the average person and an individual in the top 10% was one million pounds in the pre-crisis period, but had increased to £1.3 million in real terms by 2020-22.
The researcher continued: "These disparities are particularly worrying as economic movement in Britain is limited – people that start life affluent tend to continue being rich, and vice versa."
Proportional Economic Disparity
Although the financial disparity widening in absolute terms, the percentage of total wealth in the UK held by the richest households – called "relative wealth inequality" – has been "broadly stable since the eighties," per the research.
Over this timeframe, overall assets in the UK rose substantially from triple the annual GDP, to approximately 7.5x.
Factors of Financial Divide
So-called "passive" appreciation, via increasing property values and variations in pension valuations, were the primary factors of the growing financial disparity from 2010 onward, per the study.
These appreciations tended to accrue to senior citizens with real estate, the analysis reveals – intensifying the age-based economic gap.
Intergenerational Wealth Disparities
The average wealth gap between individuals aged 30-34 and sixty-somethings increased over twofold in actual value, from £135k in the mid-2000s, to £310k.
Geographic Differences
Furthermore, the study revealed significant regional variations, with the average level of assets in 2020-22 amounting to £290k in the SE of England, where property prices have tended to rise rapidly, versus £110k in the NE of England.
Health Crisis Years Impact
Throughout the COVID period, when countless laborers were protected by the government-supported job retention program, and Covid shutdowns reduced expenditure possibilities, the statistics indicate numerous families were in a position to set aside money, growing their net worth.
More affluent homes performed significantly better, however. "The average household in the bottom income bracket saw their liquid savings grow by only eighty pounds during the COVID years (2019-20 to 2021-22), broadly the same as the 24 months before COVID. In contrast, the typical family in the wealthiest fifth saw their available funds grow by 4,200 pounds," the report finds.
