According to new analysis, the average earner in the UK would need half a century of salary to achieve the financial standing of the most affluent 10% of the population.
Widening Wealth Gap Through the Years
This research examined net worth statistics including the Covid pandemic period and discovered that in 2006-08, it would have needed 38 years of average worker salary to enter the wealthiest decile of the financial hierarchy.
A research lead associated with the report stated: "Economic disparities in Britain are now so large that a regular employee saving all their earnings across their entire working life would still not be able to attain the highest level of the economic scale."
Quantifying the Wealth Divide
The study revealed that the disparity between the wealth of the typical individual and someone in the top 10% was £1 million in 2006-08, but had widened to £1.3m in real terms by the pandemic years.
The economist continued: "These differences are particularly worrying as financial progression in Britain is limited – individuals who begin life wealthy tend to stay wealthy, and vice versa."
Relative Wealth Inequality
Although the financial disparity widening in absolute terms, the percentage of complete net worth in the UK owned by the most affluent homes – known as "relative wealth inequality" – has been "largely unchanged since the 1980s era," according to the study.
Throughout these years, total wealth in the UK increased dramatically from triple the annual GDP, to almost 7.5 times.
Factors of Economic Disparity
So-called "automatic" appreciation, via growing real estate costs and variations in pension valuations, were the primary factors of the expanding economic divide from 2010 onward, as stated in the analysis.
These appreciations tended to accrue to elderly homeowners, the analysis reveals – intensifying the intergenerational wealth divide.
Intergenerational 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 £310,000.
Geographic Disparities
Additionally, there were significant geographic differences, with the typical amount of wealth in the pandemic period amounting to £290,000 in the southeastern region, where real estate values have typically increased quickly, versus £110,000 in the northeastern region.
Pandemic Period Consequences
Throughout the COVID period, when millions of workers were protected by the public-funded employment protection, and pandemic lockdowns reduced expenditure possibilities, the data shows countless homes were capable of accumulating, growing their net worth.
Higher-income households performed significantly better, however. "The average household in the poorest fifth saw their available funds increase by just £80 over the pandemic period (across the pandemic timeframe), broadly the same as the pre-crisis period. On the other hand, the typical family in the wealthiest fifth saw their available funds increase by £4,200," the report finds.
