Per new research, the median earner in the UK would require over five decades of salary to reach the wealth level of the richest 10% nationwide.
Growing Financial Divide Over Time
The study reviewed wealth distribution data including the Covid pandemic period and determined that back in the mid-2000s, it would have needed nearly four decades of typical employment income to join the wealthiest decile of the economic ladder.
A senior economist part of the report stated: "Wealth gaps in Britain are presently so substantial that a average worker setting aside their entire income during their working years would remain unable to reach the top of the financial hierarchy."
Assessing the Financial Disparity
The research found that the disparity between the wealth of the median citizen and an individual in the top 10% was £1m in the pre-crisis period, but had widened to £1.3m in actual value by recent times.
The economist added: "These gaps are particularly worrying as wealth mobility in Britain is restricted – people that start life well-off tend to continue being rich, and conversely applies."
Relative Wealth Inequality
Despite the economic divide expanding in absolute terms, the percentage of total wealth in the UK held by the richest households – termed "proportional economic disparity" – has been "largely unchanged since the eighties," per the analysis.
Over this timeframe, overall assets in the UK increased dramatically from thrice the yearly economic output, to approximately 7.5x.
Factors of Wealth Inequality
Referred to as "unearned" increases, through rising house prices and changes in retirement fund assessments, were the key contributors of the growing financial disparity over the past decade, per the report.
These increases typically went to older, property-owning households, the study demonstrates – intensifying the intergenerational wealth divide.
Generational Wealth Disparities
The average wealth gap between thirty-somethings and people aged 60-64 increased over twofold in actual value, from £135,000 in pre-financial crisis, to £310k.
Regional Variations
There were also stark geographic differences, with the average level of wealth in the pandemic period amounting to £290k in the southeastern region, where housing costs have tended to rise rapidly, versus £110k in the northeastern region.
Pandemic Period Consequences
Throughout the COVID period, when countless laborers were protected by the government-supported job retention program, and health crisis restrictions reduced expenditure possibilities, the statistics indicate numerous families were capable of accumulating, increasing their wealth.
Higher-income households fared much better, however. "The typical family in the poorest fifth saw their available funds rise by merely £80 over the pandemic period (across the pandemic timeframe), approximately equivalent to the pre-crisis period. Conversely, the typical family in the highest income quintile saw their liquid savings grow by 4,200 pounds," the analysis concludes.
