Based on new analysis, the typical earner in the UK would require 52 years' worth of salary to achieve the net worth of the most affluent 10% nationwide.
Expanding Financial Divide Over Time
The study analyzed financial assets statistics from the Covid pandemic period and found that back in the pre-financial crisis era, it would have required nearly four decades of average worker salary to reach the richest segment of the wealth distribution.
A senior economist associated with the analysis observed: "Wealth gaps in Britain are now so large that a regular employee accumulating their complete salary during their working years would still not be able to attain the highest level of the economic scale."
Assessing the Financial Disparity
The analysis found that the gap between the assets of the median citizen and a person belonging to the top 10% was one million pounds in the pre-crisis period, but had increased to 1.3 million pounds in inflation-adjusted terms by recent times.
The researcher added: "These gaps are especially alarming as financial progression in Britain is restricted – those who commence life well-off tend to continue being rich, and conversely applies."
Relative Wealth Inequality
Despite the wealth gap growing in absolute terms, the percentage of complete net worth in the UK owned by the most affluent homes – termed "relative wealth inequality" – has been "mostly consistent since the eighties," per the study.
During this period, total wealth in the UK rose substantially from three times the annual GDP, to nearly seven and a half times.
Factors of Financial Divide
So-called "unearned" gains, through increasing property values and variations in pension valuations, were the primary factors of the expanding economic divide from 2010 onward, as stated in the report.
These appreciations generally flowed to senior citizens with real estate, the study demonstrates – intensifying the intergenerational wealth divide.
Age-Based Economic Gaps
The median economic difference between individuals aged 30-34 and those in their early 60s grew by more than 100% in inflation-adjusted terms, from 135 thousand pounds in pre-financial crisis, to £310k.
Regional Variations
Additionally, there were stark geographic differences, with the average level of net worth in recent years reaching £290k in the southeastern region, where real estate values have tended to rise rapidly, compared with £110k in the northeastern region.
COVID Era Effects
Amid the health crisis, when numerous employees were covered under the taxpayer-backed furlough scheme, and Covid shutdowns reduced expenditure possibilities, the statistics indicate many households were able to save, growing their net worth.
More affluent homes fared much better, however. "The average household in the lowest-income quintile saw their available funds increase by just £80 over the pandemic period (2019-20 to 2021-22), approximately equivalent to the pre-crisis period. In contrast, the typical family in the wealthiest fifth saw their liquid savings increase by £4,200," the report finds.
