Based on fresh study, the median worker in the UK would have to work over five decades of income to achieve the wealth level of the most affluent 10% nationwide.
Growing Wealth Gap Through the Years
This research examined financial assets statistics covering the Covid pandemic period and determined that during the pre-financial crisis era, it would have required nearly four decades of median full-time earnings to reach the richest segment of the financial hierarchy.
A senior economist associated with the report stated: "Financial divides in Britain are currently so significant that a average worker accumulating their complete salary across their entire working life would continue to be incapable to attain the highest level of the financial hierarchy."
Measuring the Wealth Divide
The analysis found that the gap between the wealth of the typical individual and a person belonging to the richest segment was £1 million in the pre-crisis period, but had widened to 1.3 million pounds in actual value by 2020-22.
The analyst further stated: "These gaps are particularly worrying as wealth mobility in Britain is limited – people that start life well-off tend to stay wealthy, and the opposite holds true."
Relative Wealth Inequality
Despite the wealth gap growing in specific figures, the share of overall assets in the UK held by the richest households – called "relative wealth inequality" – has been "broadly stable since the 1980s," according to the study.
Throughout these years, complete net worth in the UK rose substantially from three times the annual GDP, to approximately 7.5x.
Drivers of Economic Disparity
Termed "unearned" gains, through rising house prices and variations in superannuation evaluations, were the primary factors of the widening wealth gap from 2010 onward, per the report.
These appreciations typically went to elderly homeowners, the study demonstrates – intensifying the age-based economic gap.
Generational Wealth Disparities
The typical financial disparity between individuals aged 30-34 and those in their early 60s grew by more than 100% in actual value, from £135,000 in 2006-08, to 310 thousand pounds.
Area-Based Disparities
Additionally, there were significant area-based disparities, with the median value of wealth in the pandemic period reaching £290k in south-east England, where property prices have generally grown substantially, as opposed to £110,000 in the northeastern region.
Pandemic Period Consequences
Amid the health crisis, when millions of workers were protected by the taxpayer-backed furlough scheme, and pandemic lockdowns curtailed consumption options, the data shows countless homes were able to save, growing their net worth.
Wealthier families fared much better, nevertheless. "The typical family in the lowest-income quintile saw their liquid savings increase by just £80 over the pandemic period (2019-20 to 2021-22), approximately equivalent to the two years pre-pandemic. On the other hand, the typical family in the highest income quintile saw their liquid savings increase by £4,200," the study reveals.
