Per fresh research, the average employee in the UK would need over five decades of earnings to reach the financial standing of the wealthiest 10% nationwide.
Growing Wealth Gap Across Decades
This research reviewed wealth distribution statistics covering the Covid pandemic period and found that back in the pre-financial crisis era, it would have needed nearly four decades of typical employment income to enter the richest segment of the economic ladder.
A senior economist part of the report commented: "Financial divides in Britain are currently so significant that a average worker setting aside their entire income during their working years would still not be able to attain the highest level of the financial hierarchy."
Assessing 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 the mid-2000s, but had expanded to £1.3 million in actual value by 2020-22.
The analyst added: "These gaps are doubly concerning as economic movement in Britain is low – those who commence life wealthy tend to continue being rich, and the opposite holds true."
Relative Wealth Inequality
Although the economic divide growing in absolute terms, the percentage of total wealth in the UK possessed by the wealthiest families – termed "comparative financial divide" – has been "mostly consistent since the eighties," as stated in the study.
Over this timeframe, overall assets in the UK surged from thrice the gross domestic product, to almost 7.5 times.
Drivers of Wealth Inequality
Referred to as "passive" appreciation, through rising house prices and adjustments to retirement fund assessments, were the main drivers of the expanding economic divide from 2010 onward, per the analysis.
These appreciations generally flowed to elderly homeowners, the analysis reveals – intensifying the intergenerational wealth divide.
Generational Economic Gaps
The typical financial disparity between individuals aged 30-34 and people aged 60-64 more than doubled in inflation-adjusted terms, from £135,000 in the mid-2000s, to £310k.
Geographic Disparities
Additionally, there were stark regional variations, with the average level of assets in the pandemic period standing at £290,000 in south-east England, where real estate values have generally grown substantially, compared with £110,000 in the northeastern region.
Health Crisis Years Effects
During the pandemic, when countless laborers were supported by the taxpayer-backed furlough scheme, and health crisis restrictions curtailed consumption options, the statistics indicate many households were in a position to set aside money, growing their net worth.
Wealthier families fared much better, nevertheless. "The average household in the poorest fifth saw their cash reserves rise by merely £80 during the COVID years (across the pandemic timeframe), broadly the same as the 24 months before COVID. Conversely, the average household in the highest income quintile saw their cash reserves increase by £4,200," the analysis concludes.
