Per recent study, the typical worker in the UK would need half a century of salary to attain the net worth of the most affluent 10% of the population.
Widening Wealth Gap Over Time
The analysis reviewed net worth information from the 2020-22 timeframe and discovered that back in the mid-2000s, it would have taken 38 years' worth of average worker salary to reach the top 10th of the financial hierarchy.
An economic expert associated with the analysis commented: "Economic disparities in Britain are currently so significant that a regular employee accumulating their complete salary across their entire working life would still not be able to reach the top of the economic scale."
Assessing the Economic Gap
The study found that the gap between the wealth of the typical individual and a person belonging to the top 10% was £1m in the pre-crisis period, but had widened to £1.3 million in inflation-adjusted terms by recent times.
The researcher added: "These gaps are particularly worrying as financial progression in Britain is limited – people that start life wealthy tend to stay wealthy, and vice versa."
Comparative Financial Divide
Even with the economic divide widening in absolute terms, the percentage of total wealth in the UK possessed by the most affluent homes – termed "comparative financial divide" – has been "mostly consistent since the eighties," according to the analysis.
Over this timeframe, complete net worth in the UK increased dramatically from three times the gross domestic product, to almost 7.5 times.
Drivers of Wealth Inequality
Termed "unearned" increases, through increasing property values and changes in retirement fund assessments, were the main drivers of the growing financial disparity since 2010, according to the study.
These increases generally flowed to elderly homeowners, the study demonstrates – exacerbating the age-based economic gap.
Age-Based Wealth Disparities
The average wealth gap between individuals aged 30-34 and sixty-somethings increased over twofold in actual value, from £135,000 in 2006-08, to £310k.
Regional Differences
Furthermore, the study revealed significant geographic differences, with the median value of wealth in the pandemic period amounting to £290k in south-east England, where housing costs have tended to rise rapidly, as opposed to 110 thousand pounds in the NE of England.
Health Crisis Years Consequences
Throughout the COVID period, when numerous employees were protected by the taxpayer-backed furlough scheme, and pandemic lockdowns curtailed consumption options, the information reveals numerous families were able to save, enhancing their financial standing.
Higher-income households performed significantly better, though. "The typical family in the bottom income bracket saw their liquid savings grow by only eighty pounds over the pandemic period (from 2019 to 2022), approximately equivalent to the two years pre-pandemic. Conversely, the median home in the top income bracket saw their available funds grow by 4,200 pounds," the study reveals.
