Based on fresh analysis, the median worker in the UK would require over five decades of income to attain the wealth level of the wealthiest 10% of the population.
Growing Wealth Gap Through the Years
The study reviewed wealth distribution statistics from the recent health crisis years and discovered that in the mid-2000s, it would have taken 38 years of average worker salary to join the richest segment of the economic ladder.
A research lead involved with the report commented: "Financial divides in Britain are presently so substantial that a average worker accumulating their complete salary throughout their career would still not be able to achieve the peak of the wealth ladder."
Quantifying the Wealth Divide
The analysis revealed that the difference between the net worth of the typical individual and someone in the richest segment was one million pounds in the mid-2000s, but had increased to £1.3 million in inflation-adjusted terms by 2020-22.
The researcher continued: "These disparities are particularly worrying as financial progression in Britain is limited – people that start life well-off tend to remain affluent, and vice versa."
Comparative Financial Divide
Even with the financial disparity growing in actual numbers, the share of complete net worth in the UK owned by the richest households – known as "relative wealth inequality" – has been "mostly consistent since the 1980s," according to the analysis.
During this period, complete net worth in the UK increased dramatically from thrice the gross domestic product, to nearly seven and a half times.
Factors of Economic Disparity
Referred to as "passive" appreciation, via increasing property values and variations in superannuation evaluations, were the key contributors of the growing financial disparity since 2010, according to the study.
These appreciations generally flowed to senior citizens with real estate, the research shows – worsening the age-based economic gap.
Intergenerational Financial Divides
The average wealth gap between thirty-somethings and sixty-somethings increased over twofold in real terms, from £135,000 in the mid-2000s, to 310 thousand pounds.
Area-Based Differences
There were also stark geographic differences, with the typical amount of net worth in the pandemic period amounting to £290,000 in the SE of England, where property prices have tended to rise rapidly, compared with £110,000 in the northeastern region.
COVID Era Effects
During the pandemic, when millions of workers were covered under the taxpayer-backed furlough scheme, and Covid shutdowns limited opportunities for spending, the data shows numerous families were in a position to set aside money, increasing their wealth.
Higher-income households achieved superior outcomes, 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), approximately equivalent to the two years pre-pandemic. In contrast, the typical family in the wealthiest fifth saw their available funds grow by 4,200 pounds," the study reveals.
