According to recent analysis, the median worker in the UK would need 52 years' worth of income to reach the wealth level of the most affluent 10% of the population.
Growing Economic Disparity Over Time
The analysis analyzed financial assets statistics covering the Covid pandemic period and found that back in the pre-financial crisis era, it would have required 38 years' worth of typical employment income to reach the top 10th of the financial hierarchy.
A research lead part of the study observed: "Economic disparities in Britain are currently so significant that a regular employee saving all their earnings throughout their career would continue to be incapable to reach the top of the financial hierarchy."
Assessing the Financial Disparity
The research discovered that the disparity between the net worth of the average person and a person belonging to the top 10% was one million pounds in the pre-crisis period, but had increased to £1.3 million in actual value by recent times.
The analyst continued: "These differences are especially alarming as economic movement in Britain is limited – individuals who begin life affluent tend to remain affluent, and conversely applies."
Comparative Financial Divide
Even with the wealth gap expanding in specific figures, the share of overall assets in the UK owned by the richest households – known as "comparative financial divide" – has been "broadly stable since the 1980s era," according to the study.
Over this timeframe, overall assets in the UK surged from three times the gross domestic product, to almost 7.5 times.
Drivers of Financial Divide
Termed "unearned" increases, through rising house prices and variations in superannuation evaluations, were the main drivers of the expanding economic divide over the past decade, as stated in the analysis.
These increases typically went to older, property-owning households, the research shows – intensifying the intergenerational wealth divide.
Generational Financial Divides
The median economic difference between people in their early 30s and people aged 60-64 increased over twofold in real terms, from 135 thousand pounds in 2006-08, to £310,000.
Geographic Differences
There were also pronounced area-based disparities, with the average level of assets in recent years reaching £290,000 in the SE of England, where property prices have generally grown substantially, compared with £110k in the north-east.
Health Crisis Years Consequences
Amid the health crisis, when numerous employees were protected by the government-supported job retention program, and pandemic lockdowns reduced expenditure possibilities, the information reveals many households were able to save, increasing their wealth.
Wealthier families fared much better, nevertheless. "The median home in the poorest fifth saw their available funds increase by just £80 over the pandemic period (2019-20 to 2021-22), approximately equivalent to the two years pre-pandemic. Conversely, the typical family in the highest income quintile saw their liquid savings increase by £4,200," the analysis concludes.
