According to new research, the average worker in the UK would require half a century of salary to attain the net worth of the richest 10% of the population.
Widening Wealth Gap Over Time
The study analyzed financial assets data including the 2020-22 timeframe and determined that during 2006-08, it would have needed nearly four decades of average worker salary to enter the top 10th of the financial hierarchy.
A senior economist part of the study observed: "Financial divides in Britain are currently so significant that a typical full-time employee accumulating their complete salary during their working years would continue to be incapable to reach the top of the wealth ladder."
Measuring the Wealth Divide
The research found that the disparity between the wealth of the median citizen and a person belonging to the wealthiest decile was £1m in 2006-08, but had expanded to £1.3m in real terms by 2020-22.
The analyst further stated: "These differences are especially alarming as wealth mobility in Britain is limited – people that start life well-off tend to remain affluent, and vice versa."
Relative Wealth Inequality
Even with the financial disparity expanding in specific figures, the portion of overall assets in the UK possessed by the most affluent homes – termed "relative wealth inequality" – has been "broadly stable since the eighties," as stated in the study.
Throughout these years, total wealth in the UK increased dramatically from thrice the gross domestic product, to almost 7.5 times.
Drivers of Wealth Inequality
Termed "passive" increases, via rising house prices and adjustments to superannuation evaluations, were the key contributors of the widening wealth gap over the past decade, per the report.
These gains tended to accrue to older, property-owning households, the study demonstrates – worsening the intergenerational wealth divide.
Intergenerational Economic Gaps
The typical financial disparity between individuals aged 30-34 and those in their early 60s grew by more than 100% in actual value, from £135k in pre-financial crisis, to 310 thousand pounds.
Geographic Differences
Furthermore, the study revealed pronounced geographic differences, with the median value of assets in the pandemic period amounting to £290,000 in the SE of England, where property prices have generally grown substantially, as opposed to £110,000 in the north-east.
Pandemic Period Consequences
During the pandemic, when countless laborers were protected by the taxpayer-backed furlough scheme, and Covid shutdowns limited opportunities for spending, the information reveals many households were capable of accumulating, increasing their wealth.
More affluent homes fared much better, nevertheless. "The median home in the bottom income bracket saw their liquid savings rise by merely £80 throughout the health crisis (across the pandemic timeframe), roughly identical to the two years pre-pandemic. Conversely, the typical family in the wealthiest fifth saw their available funds increase by £4,200," the report finds.
