Per fresh research, the average employee in the UK would need 52 years' worth of salary to attain the net worth of the most affluent 10% of the population.
Expanding Economic Disparity Across Decades
The analysis reviewed wealth distribution information including the Covid pandemic period and found that in the mid-2000s, it would have needed 38 years of typical employment income to reach the top 10th of the economic ladder.
A senior economist associated with the study observed: "Financial divides in Britain are presently so substantial that a typical full-time employee saving all their earnings throughout their career would continue to be incapable to reach the top of the financial hierarchy."
Quantifying the Financial Disparity
The study found that the difference between the net worth of the typical individual and a person belonging to the wealthiest decile was £1 million in the pre-crisis period, but had increased to £1.3 million in inflation-adjusted terms by 2020-22.
The economist added: "These gaps are especially alarming as economic movement in Britain is low – people that start life wealthy tend to remain affluent, and vice versa."
Comparative Financial Divide
Even with the economic divide widening in specific figures, the share of overall assets in the UK owned by the wealthiest families – known as "relative wealth inequality" – has been "mostly consistent since the 1980s era," according to the analysis.
Over this timeframe, overall assets in the UK surged from three times the yearly economic output, to nearly seven and a half times.
Contributors of Wealth Inequality
Termed "unearned" gains, by means of growing real estate costs and changes in pension valuations, were the key contributors of the widening wealth gap over the past decade, as stated in the study.
These increases typically went to older, property-owning households, the study demonstrates – worsening the generational financial disparity.
Intergenerational Wealth Disparities
The typical financial disparity between individuals aged 30-34 and those in their early 60s grew by more than 100% in inflation-adjusted terms, from 135 thousand pounds in the mid-2000s, to 310 thousand pounds.
Area-Based Variations
Additionally, there were pronounced geographic differences, with the median value of net worth in the pandemic period standing at £290k in south-east England, where property prices have generally grown substantially, versus 110 thousand pounds in the north-east.
Pandemic Period Impact
During the pandemic, when millions of workers were protected by the taxpayer-backed furlough scheme, and health crisis restrictions limited opportunities for spending, the information reveals many households were able to save, increasing their wealth.
Higher-income households performed significantly better, though. "The typical family in the bottom income bracket saw their available funds increase by just £80 over the pandemic period (from 2019 to 2022), broadly the same as the pre-crisis period. In contrast, the typical family in the wealthiest fifth saw their available funds rise by £4,200," the study reveals.
