According to recent research, the average earner in the UK would require over five decades of salary to attain the wealth level of the richest 10% in the country.
Growing Wealth Gap Over Time
The study reviewed wealth distribution statistics from the recent health crisis years and discovered that back in 2006-08, it would have required nearly four decades of median full-time earnings to enter the richest segment of the wealth distribution.
A senior economist part of the report stated: "Financial divides in Britain are now so large that a regular employee saving all their earnings throughout their career would continue to be incapable to achieve the peak of the economic scale."
Measuring the Economic Gap
The analysis found that the difference between the net worth of the typical individual and someone in the wealthiest decile was one million pounds in 2006-08, but had widened to £1.3m in inflation-adjusted terms by the pandemic years.
The economist further stated: "These differences are doubly concerning as economic movement in Britain is restricted – those who commence life affluent tend to continue being rich, and the opposite holds true."
Proportional Economic Disparity
Even with the financial disparity growing in specific figures, the share of complete net worth in the UK owned by the most affluent homes – termed "proportional economic disparity" – has been "broadly stable since the eighties," per the research.
Throughout these years, total wealth in the UK increased dramatically from three times the annual GDP, to approximately 7.5x.
Factors of Wealth Inequality
So-called "unearned" gains, through growing real estate costs and variations in retirement fund assessments, were the main drivers of the growing financial disparity since 2010, according to the report.
These gains tended to accrue to elderly homeowners, the analysis reveals – exacerbating the generational financial disparity.
Age-Based Economic Gaps
The typical financial disparity between individuals aged 30-34 and people aged 60-64 increased over twofold in real terms, from £135k in 2006-08, to 310 thousand pounds.
Area-Based Disparities
There were also pronounced area-based disparities, with the typical amount of wealth in recent years reaching 290 thousand pounds in south-east England, where property prices have generally grown substantially, as opposed to 110 thousand pounds in the north-east.
Health Crisis Years Impact
During the pandemic, when countless laborers were supported by the public-funded employment protection, and health crisis restrictions reduced expenditure possibilities, the statistics indicate countless homes were capable of accumulating, growing their net worth.
More affluent homes performed significantly better, though. "The typical family in the bottom income bracket saw their cash reserves grow by only eighty pounds over the pandemic period (2019-20 to 2021-22), broadly the same as the two years pre-pandemic. Conversely, the typical family in the top income bracket saw their liquid savings increase by £4,200," the study reveals.
