Based on new study, the typical earner in the UK would need 52 years' worth of salary to attain the net worth of the richest 10% of the population.
Expanding Wealth Gap Over Time
This research examined wealth distribution data covering the 2020-22 timeframe and found that during the pre-financial crisis era, it would have needed 38 years' worth of average worker salary to enter the richest segment of the wealth distribution.
A senior economist associated with the study commented: "Economic disparities in Britain are presently so substantial that a regular employee setting aside their entire income throughout their career would continue to be incapable to attain the highest level of the economic scale."
Quantifying the Financial Disparity
The analysis discovered that the disparity between the assets of the median citizen and an individual in the top 10% was £1m in 2006-08, but had expanded to 1.3 million pounds in inflation-adjusted terms by the pandemic years.
The analyst further stated: "These disparities are doubly concerning as economic movement in Britain is restricted – individuals who begin life well-off tend to stay wealthy, and vice versa."
Proportional Economic Disparity
Even with the economic divide growing in absolute terms, the share of total wealth in the UK held by the wealthiest families – called "comparative financial divide" – has been "broadly stable since the eighties," according to the research.
Over this timeframe, complete net worth in the UK increased dramatically from triple the annual GDP, to nearly seven and a half times.
Contributors of Financial Divide
Termed "automatic" appreciation, through growing real estate costs and changes in pension valuations, were the primary factors of the growing financial disparity over the past decade, per the study.
These gains tended to accrue to older, property-owning households, the study demonstrates – intensifying the generational financial disparity.
Generational Economic Gaps
The typical financial disparity between thirty-somethings and sixty-somethings grew by more than 100% in real terms, from £135,000 in pre-financial crisis, to 310 thousand pounds.
Regional Variations
Additionally, there were significant regional variations, with the median value of wealth in 2020-22 reaching £290k in south-east England, where housing costs have generally grown substantially, as opposed to 110 thousand pounds in the northeastern region.
Health Crisis Years Consequences
Throughout the COVID period, when millions of workers were supported by the taxpayer-backed furlough scheme, and health crisis restrictions reduced expenditure possibilities, the statistics indicate countless homes were capable of accumulating, increasing their wealth.
Higher-income households fared much better, though. "The average household in the bottom income bracket saw their available funds increase by just £80 during the COVID years (from 2019 to 2022), approximately equivalent to the two years pre-pandemic. In contrast, the average household in the top income bracket saw their cash reserves increase by £4,200," the analysis concludes.
