Per new study, the median employee in the UK would have to work over five decades of income to achieve the net worth of the most affluent 10% of the population.
Expanding Wealth Gap Across Decades
The analysis examined financial assets statistics including the Covid pandemic period and determined that during 2006-08, it would have taken nearly four decades of average worker salary to reach the wealthiest decile of the wealth distribution.
A senior economist involved with the report stated: "Economic disparities in Britain are presently so substantial that a typical full-time employee setting aside their entire income during their working years would still not be able to reach the top of the financial hierarchy."
Measuring the Financial Disparity
The study revealed that the difference between the assets of the median citizen and an individual in the wealthiest decile was £1m in the pre-crisis period, but had increased to £1.3 million in real terms by 2020-22.
The economist further stated: "These differences are particularly worrying as wealth mobility in Britain is restricted – those who commence life affluent tend to remain affluent, and the opposite holds true."
Comparative Financial Divide
Despite the financial disparity widening in specific figures, the share of overall assets in the UK possessed by the most affluent homes – called "relative wealth inequality" – has been "mostly consistent since the 1980s era," per the research.
During this period, complete net worth in the UK rose substantially from triple the gross domestic product, to nearly seven and a half times.
Drivers of Financial Divide
Termed "unearned" increases, via rising house prices and adjustments to superannuation evaluations, were the key contributors of the expanding economic divide from 2010 onward, as stated in the analysis.
These appreciations typically went to senior citizens with real estate, the analysis reveals – worsening the age-based economic gap.
Generational Financial Divides
The average wealth gap between thirty-somethings and people aged 60-64 grew by more than 100% in actual value, from £135,000 in pre-financial crisis, to £310k.
Regional Differences
Additionally, there were stark regional variations, with the typical amount of net worth in recent years standing at £290,000 in south-east England, where real estate values have generally grown substantially, as opposed to £110k in the NE of England.
COVID Era Consequences
Throughout the COVID period, when numerous employees were supported by the public-funded employment protection, and health crisis restrictions curtailed consumption options, the statistics indicate countless homes were able to save, growing their net worth.
Higher-income households performed significantly better, though. "The median home in the poorest fifth saw their cash reserves increase by just £80 throughout the health crisis (across the pandemic timeframe), broadly the same as the 24 months before COVID. On the other hand, the median home in the wealthiest fifth saw their cash reserves rise by £4,200," the report finds.
