Per new research, the typical employee in the UK would have to work half a century of earnings to achieve the wealth level of the richest 10% of the population.
Widening Wealth Gap Through the Years
This research reviewed net worth statistics including the Covid pandemic period and determined that back in the pre-financial crisis era, it would have needed nearly four decades of average worker salary to reach the top 10th of the economic ladder.
An economic expert part of the study stated: "Economic disparities in Britain are now so large that a typical full-time employee accumulating their complete salary throughout their career would still not be able to reach the top of the financial hierarchy."
Assessing the Financial Disparity
The research found that the gap between the net worth of the median citizen and someone in the richest segment was £1 million in the pre-crisis period, but had increased to £1.3m in inflation-adjusted terms by 2020-22.
The analyst continued: "These disparities are doubly concerning as wealth mobility in Britain is restricted – those who commence life well-off tend to remain affluent, and vice versa."
Comparative Financial Divide
Although the wealth gap growing in actual numbers, the portion of overall assets in the UK possessed by the wealthiest families – termed "proportional economic disparity" – has been "largely unchanged since the 1980s," as stated in the study.
Over this timeframe, total wealth in the UK surged from triple the annual GDP, to approximately 7.5x.
Drivers of Economic Disparity
So-called "automatic" increases, by means of increasing property values and adjustments to retirement fund assessments, were the main drivers of the expanding economic divide from 2010 onward, as stated in the analysis.
These increases generally flowed to senior citizens with real estate, the analysis reveals – intensifying the generational financial disparity.
Age-Based Wealth Disparities
The average wealth gap between people in their early 30s and people aged 60-64 more than doubled in actual value, from £135k in pre-financial crisis, to £310k.
Geographic Variations
There were also pronounced geographic differences, with the typical amount of assets in the pandemic period standing at £290,000 in the southeastern region, where real estate values have generally grown substantially, versus £110,000 in the NE of England.
COVID Era Effects
Amid the health crisis, when countless laborers were protected by the government-supported job retention program, and Covid shutdowns limited opportunities for spending, the data shows numerous families were capable of accumulating, growing their net worth.
Wealthier families achieved superior outcomes, though. "The average household in the poorest fifth saw their cash reserves rise by merely £80 during the COVID years (across the pandemic timeframe), approximately equivalent to the 24 months before COVID. Conversely, the median home in the wealthiest fifth saw their liquid savings rise by £4,200," the analysis concludes.
