Per recent analysis, the typical worker in the UK would have to work half a century of earnings to achieve the wealth level of the most affluent 10% of the population.
Growing Financial Divide Over Time
The analysis analyzed net worth statistics from the 2020-22 timeframe and discovered that in the mid-2000s, it would have needed nearly four decades of average worker salary to join the top 10th of the financial hierarchy.
A senior economist associated with the study stated: "Wealth gaps in Britain are currently so significant that a typical full-time employee accumulating their complete salary across their entire working life would continue to be incapable to reach the top of the economic scale."
Quantifying the Wealth Divide
The research found that the disparity between the wealth of the average person and someone in the wealthiest decile was £1m in 2006-08, but had widened to £1.3m in inflation-adjusted terms by the pandemic years.
The analyst added: "These differences are doubly concerning as financial progression in Britain is limited – people that start life affluent tend to stay wealthy, and conversely applies."
Comparative Financial Divide
Although the economic divide growing in actual numbers, the share of complete net worth in the UK possessed by the richest households – called "relative wealth inequality" – has been "mostly consistent since the 1980s era," as stated in the study.
Throughout these years, total wealth in the UK increased dramatically from three times the gross domestic product, to nearly seven and a half times.
Contributors of Economic Disparity
So-called "unearned" gains, by means of growing real estate costs and adjustments to retirement fund assessments, were the main drivers of the expanding economic divide over the past decade, as stated in the analysis.
These increases tended to accrue to older, property-owning households, the research shows – worsening the age-based economic gap.
Age-Based Economic Gaps
The typical financial disparity between thirty-somethings and people aged 60-64 increased over twofold in actual value, from 135 thousand pounds in pre-financial crisis, to 310 thousand pounds.
Geographic Differences
Furthermore, the study revealed stark geographic differences, with the typical amount of net worth in 2020-22 amounting to £290k in the southeastern region, where property prices have generally grown substantially, compared with 110 thousand pounds in the north-east.
Health Crisis Years Consequences
Throughout the COVID period, when countless laborers were covered under the taxpayer-backed furlough scheme, and health crisis restrictions curtailed consumption options, the data shows many households were capable of accumulating, increasing their wealth.
Higher-income households fared much better, though. "The average household in the bottom income bracket saw their cash reserves increase by just £80 during the COVID years (2019-20 to 2021-22), broadly the same as the pre-crisis period. Conversely, the median home in the highest income quintile saw their available funds increase by £4,200," the study reveals.
