Based on fresh analysis, the average earner in the UK would require half a century of earnings to attain the wealth level of the most affluent 10% nationwide.
Expanding Economic Disparity Over Time
This research examined wealth distribution information covering the Covid pandemic period and determined that back in 2006-08, it would have taken 38 years of average worker salary to join the richest segment of the economic ladder.
An economic expert part of the study observed: "Financial divides in Britain are currently so significant that a regular employee saving all their earnings across their entire working life would remain unable to reach the top of the financial hierarchy."
Measuring the Economic Gap
The analysis discovered that the gap between the assets of the typical individual and someone in the wealthiest decile was £1 million in 2006-08, but had widened to 1.3 million pounds in inflation-adjusted terms by recent times.
The researcher further stated: "These disparities are especially alarming as financial progression in Britain is limited – those who commence life wealthy tend to remain affluent, and conversely applies."
Relative Wealth Inequality
Despite the wealth gap expanding in absolute terms, the portion of total wealth in the UK owned by the wealthiest families – known as "comparative financial divide" – has been "broadly stable since the eighties," per the research.
During this period, total wealth in the UK surged from thrice the gross domestic product, to approximately 7.5x.
Drivers of Wealth Inequality
Referred to as "unearned" appreciation, via growing real estate costs and variations in pension valuations, were the main drivers of the expanding economic divide since 2010, as stated in the report.
These appreciations generally flowed to older, property-owning households, the study demonstrates – exacerbating the intergenerational wealth divide.
Generational Wealth Disparities
The median economic difference between people in their early 30s and sixty-somethings grew by more than 100% in actual value, from £135k in 2006-08, to £310,000.
Regional Variations
There were also pronounced regional variations, with the average level of wealth in recent years reaching 290 thousand pounds in the SE of England, where property prices have tended to rise rapidly, as opposed to 110 thousand pounds in the north-east.
Pandemic Period Impact
Throughout the COVID period, when millions of workers were protected by the taxpayer-backed furlough scheme, and Covid shutdowns curtailed consumption options, the statistics indicate numerous families were able to save, growing their net worth.
Wealthier families fared much better, nevertheless. "The average household in the bottom income bracket saw their liquid savings increase by just £80 throughout the health crisis (across the pandemic timeframe), approximately equivalent to the two years pre-pandemic. In contrast, the median home in the wealthiest fifth saw their liquid savings grow by 4,200 pounds," the analysis concludes.
