Per new study, the median worker in the UK would need half a century of income to attain the net worth of the wealthiest 10% in the country.
Widening Economic Disparity Over Time
The study examined financial assets information including the recent health crisis years and discovered that during the mid-2000s, it would have taken 38 years of typical employment income to join the top 10th of the wealth distribution.
A senior economist involved with the report commented: "Economic disparities in Britain are currently so significant that a average worker saving all their earnings during their working years would remain unable to attain the highest level of the economic scale."
Quantifying the Wealth Divide
The research discovered that the disparity between the assets of the average person and a person belonging to the richest segment was £1m in the mid-2000s, but had increased to £1.3 million in inflation-adjusted terms by the pandemic years.
The researcher added: "These disparities are doubly concerning as wealth mobility in Britain is restricted – individuals who begin life wealthy tend to stay wealthy, and vice versa."
Comparative Financial Divide
Even with the wealth gap expanding in actual numbers, the share of complete net worth in the UK held by the wealthiest families – termed "comparative financial divide" – has been "largely unchanged since the eighties," per the research.
During this period, complete net worth in the UK increased dramatically from thrice the yearly economic output, to approximately 7.5x.
Drivers of Wealth Inequality
Referred to as "passive" gains, by means of increasing property values and changes in pension valuations, were the primary factors of the widening wealth gap since 2010, as stated in the analysis.
These increases typically went to elderly homeowners, the research shows – worsening the generational financial disparity.
Intergenerational Financial Divides
The average wealth gap between individuals aged 30-34 and sixty-somethings increased over twofold in real terms, from £135k in pre-financial crisis, to £310k.
Area-Based Disparities
There were also significant area-based disparities, with the median value of assets in recent years standing at £290,000 in south-east England, where property prices have tended to rise rapidly, versus 110 thousand pounds in the northeastern region.
Health Crisis Years Impact
Amid the health crisis, when millions of workers were supported by the taxpayer-backed furlough scheme, and pandemic lockdowns reduced expenditure possibilities, the data shows many households were in a position to set aside money, increasing their wealth.
Wealthier families achieved superior outcomes, however. "The average household in the lowest-income quintile saw their liquid savings increase by just £80 throughout the health crisis (across the pandemic timeframe), broadly the same as the two years pre-pandemic. In contrast, the median home in the highest income quintile saw their available funds grow by 4,200 pounds," the analysis concludes.
