Based on new analysis, the average employee in the UK would have to work 52 years' worth of income to reach the financial standing of the wealthiest 10% of the population.
Expanding Economic Disparity Over Time
The study examined financial assets information covering the Covid pandemic period and discovered that back in the mid-2000s, it would have taken nearly four decades of average worker salary to enter the wealthiest decile of the economic ladder.
An economic expert associated with the report stated: "Wealth gaps in Britain are presently so substantial that a average worker accumulating their complete salary during their working years would still not be able to attain the highest level of the financial hierarchy."
Assessing the Financial Disparity
The study revealed that the disparity between the wealth of the typical individual and someone in the richest segment was one million pounds in the mid-2000s, but had expanded to £1.3m in inflation-adjusted terms by the pandemic years.
The economist continued: "These differences are particularly worrying as wealth mobility in Britain is low – people that start life wealthy tend to remain affluent, and the opposite holds true."
Relative Wealth Inequality
Even with the financial disparity growing in specific figures, the percentage of total wealth in the UK held by the wealthiest families – termed "relative wealth inequality" – has been "largely unchanged since the 1980s era," as stated in the analysis.
During this period, total wealth in the UK surged from three times the annual GDP, to approximately 7.5x.
Factors of Financial Divide
Termed "unearned" gains, via rising house prices and changes in retirement fund assessments, were the key contributors of the widening wealth gap over the past decade, as stated in the report.
These increases typically went to senior citizens with real estate, the study demonstrates – exacerbating the intergenerational wealth divide.
Generational Financial Divides
The average wealth gap between people in their early 30s and people aged 60-64 grew by more than 100% in inflation-adjusted terms, from £135,000 in 2006-08, to £310k.
Geographic Disparities
Furthermore, the study revealed stark geographic differences, with the median value of wealth in recent years amounting to 290 thousand pounds in the southeastern region, where housing costs have tended to rise rapidly, versus £110k in the northeastern region.
COVID Era Effects
During the pandemic, when countless laborers were protected by the government-supported job retention program, and pandemic lockdowns curtailed consumption options, the information reveals countless homes were in a position to set aside money, enhancing their financial standing.
Wealthier families fared much better, though. "The median home in the bottom income bracket saw their liquid savings rise by merely £80 throughout the health crisis (across the pandemic timeframe), approximately equivalent to the pre-crisis period. On the other hand, the median home in the highest income quintile saw their available funds increase by £4,200," the report finds.
