Per fresh research, the median worker in the UK would require over five decades of salary to attain the wealth level of the most affluent 10% in the country.
Expanding Wealth Gap Across Decades
The study reviewed financial assets information from the recent health crisis years and discovered that back in the mid-2000s, it would have taken 38 years' worth of typical employment income to join the richest segment of the financial hierarchy.
An economic expert associated with the study commented: "Wealth gaps in Britain are now so large that a regular employee saving all their earnings throughout their career would remain unable to attain the highest level of the financial hierarchy."
Quantifying the Wealth Divide
The analysis found that the gap between the assets of the typical individual and someone in the wealthiest decile was £1m in the pre-crisis period, but had increased to £1.3 million in real terms by recent times.
The researcher continued: "These differences are especially alarming as wealth mobility in Britain is low – those who commence life well-off tend to stay wealthy, and vice versa."
Relative Wealth Inequality
Even with the wealth gap expanding in specific figures, the share of complete net worth in the UK owned by the most affluent homes – known as "comparative financial divide" – has been "broadly stable since the eighties," as stated in the research.
Throughout these years, total wealth in the UK increased dramatically from three times the yearly economic output, to almost 7.5 times.
Drivers of Financial Divide
So-called "unearned" increases, through rising house prices and adjustments to superannuation evaluations, were the main drivers of the growing financial disparity from 2010 onward, as stated in the study.
These appreciations tended to accrue to elderly homeowners, the study demonstrates – worsening the intergenerational wealth divide.
Intergenerational Financial Divides
The average wealth gap between thirty-somethings and sixty-somethings increased over twofold in real terms, from £135,000 in pre-financial crisis, to £310k.
Area-Based Disparities
Furthermore, the study revealed stark geographic differences, with the typical amount of assets in the pandemic period amounting to 290 thousand pounds in the southeastern region, where real estate values have generally grown substantially, versus 110 thousand pounds in the northeastern region.
Health Crisis Years Impact
Throughout the COVID period, when numerous employees were covered under the taxpayer-backed furlough scheme, and pandemic lockdowns limited opportunities for spending, the statistics indicate countless homes were able to save, growing their net worth.
Wealthier families fared much better, though. "The median home in the poorest fifth saw their liquid savings grow by only eighty pounds throughout the health crisis (2019-20 to 2021-22), roughly identical to the 24 months before COVID. On the other hand, the median home in the top income bracket saw their cash reserves rise by £4,200," the report finds.
