According to recent analysis, the median worker in the UK would need 52 years' worth of salary to attain the wealth level of the wealthiest 10% in the country.
Growing Wealth Gap Through the Years
The study examined financial assets data covering the recent health crisis years and determined that back in the mid-2000s, it would have required 38 years of median full-time earnings to reach the richest segment of the financial hierarchy.
A research lead associated with the analysis stated: "Economic disparities in Britain are currently so significant that a typical full-time employee saving all their earnings throughout their career would still not be able to attain the highest level of the financial hierarchy."
Quantifying the Financial Disparity
The study discovered that the difference between the net worth of the median citizen and a person belonging to the top 10% was one million pounds in the mid-2000s, but had increased to £1.3m in inflation-adjusted terms by recent times.
The analyst further stated: "These differences are particularly worrying as economic movement in Britain is low – people that start life affluent tend to continue being rich, and the opposite holds true."
Relative Wealth Inequality
Despite the economic divide expanding in absolute terms, the share of total wealth in the UK owned by the most affluent homes – termed "proportional economic disparity" – has been "largely unchanged since the 1980s era," per the research.
During this period, total wealth in the UK rose substantially from triple the gross domestic product, to nearly seven and a half times.
Drivers of Financial Divide
So-called "automatic" gains, through increasing property values and adjustments to superannuation evaluations, were the primary factors of the growing financial disparity since 2010, according to the study.
These gains typically went to senior citizens with real estate, the study demonstrates – exacerbating the age-based economic gap.
Intergenerational Wealth Disparities
The average wealth gap between thirty-somethings and people aged 60-64 more than doubled in inflation-adjusted terms, from 135 thousand pounds in the mid-2000s, to £310k.
Area-Based Differences
Furthermore, the study revealed pronounced regional variations, with the median value of assets in the pandemic period reaching £290k in south-east England, where housing costs have typically increased quickly, versus 110 thousand pounds in the north-east.
COVID Era Impact
During the pandemic, when millions of workers were supported by the taxpayer-backed furlough scheme, and Covid shutdowns limited opportunities for spending, the statistics indicate countless homes were able to save, growing their net worth.
Wealthier families performed significantly better, however. "The typical family in the bottom income bracket saw their liquid savings grow by only eighty pounds over the pandemic period (across the pandemic timeframe), approximately equivalent to the 24 months before COVID. Conversely, the typical family in the wealthiest fifth saw their cash reserves increase by £4,200," the report finds.
