Per new analysis, the median employee in the UK would require half a century of salary to reach the net worth of the wealthiest 10% nationwide.
Widening Wealth Gap Through the Years
This research examined financial assets data from the 2020-22 timeframe and discovered that in 2006-08, it would have required nearly four decades of typical employment income to enter the top 10th of the wealth distribution.
A senior economist associated with the report stated: "Wealth gaps in Britain are now so large that a average worker saving all their earnings throughout their career would still not be able to reach the top of the economic scale."
Quantifying the Financial Disparity
The study found that the difference between the wealth of the typical individual and someone in the top 10% was £1m in 2006-08, but had increased to £1.3m in inflation-adjusted terms by recent times.
The economist added: "These gaps are doubly concerning as economic movement in Britain is limited – people that start life well-off tend to remain affluent, and conversely applies."
Proportional Economic Disparity
Despite the financial disparity growing in specific figures, the portion of overall assets in the UK owned by the richest households – called "relative wealth inequality" – has been "broadly stable since the 1980s era," according to the study.
Over this timeframe, total wealth in the UK surged from triple the gross domestic product, to almost 7.5 times.
Factors of Economic Disparity
So-called "unearned" gains, via growing real estate costs and adjustments to retirement fund assessments, were the key contributors of the expanding economic divide from 2010 onward, according to the study.
These increases generally flowed to older, property-owning households, the study demonstrates – exacerbating the generational financial disparity.
Generational Financial Divides
The median economic difference between people in their early 30s and people aged 60-64 grew by more than 100% in real terms, from £135k in the mid-2000s, to £310,000.
Regional Disparities
Additionally, there were pronounced geographic differences, with the median value of assets in recent years reaching £290k in the SE of England, where real estate values have typically increased quickly, as opposed to 110 thousand pounds in the north-east.
COVID Era Impact
Amid the health crisis, when millions of workers were covered under the taxpayer-backed furlough scheme, and pandemic lockdowns reduced expenditure possibilities, the information reveals many households were able to save, increasing their wealth.
Wealthier families achieved superior outcomes, though. "The median home in the lowest-income quintile saw their cash reserves rise by merely £80 over the pandemic period (2019-20 to 2021-22), roughly identical to the 24 months before COVID. On the other hand, the median home in the wealthiest fifth saw their liquid savings rise by £4,200," the report finds.
