According to new analysis, the average employee in the UK would have to work 52 years' worth of salary to attain the wealth level of the most affluent 10% of the population.
Expanding Economic Disparity Across Decades
The study examined financial assets statistics from the Covid pandemic period and determined that back in 2006-08, it would have taken 38 years of typical employment income to enter the richest segment of the economic ladder.
An economic expert involved with the study observed: "Economic disparities in Britain are now so large that a regular employee saving all their earnings throughout their career would remain unable to reach the top of the financial hierarchy."
Assessing the Financial Disparity
The study discovered that the gap between the net worth of the average person and a person belonging to the wealthiest decile was £1m in 2006-08, but had increased to £1.3 million in inflation-adjusted terms by recent times.
The economist continued: "These disparities are doubly concerning as economic movement in Britain is restricted – people that start life well-off tend to continue being rich, and conversely applies."
Proportional Economic Disparity
Despite the wealth gap expanding in actual numbers, the percentage of total wealth in the UK owned by the most affluent homes – termed "relative wealth inequality" – has been "mostly consistent since the 1980s era," according to the study.
Over this timeframe, complete net worth in the UK surged from three times the annual GDP, to nearly seven and a half times.
Factors of Wealth Inequality
So-called "unearned" increases, via growing real estate costs and changes in retirement fund assessments, were the main drivers of the expanding economic divide since 2010, according to the study.
These increases generally flowed to elderly homeowners, the study demonstrates – exacerbating the age-based economic gap.
Generational Financial Divides
The median economic difference between thirty-somethings and sixty-somethings grew by more than 100% in real terms, from £135,000 in the mid-2000s, to 310 thousand pounds.
Geographic Disparities
Additionally, there were significant geographic differences, with the average level of wealth in the pandemic period reaching £290k in south-east England, where property prices have generally grown substantially, as opposed to £110,000 in the northeastern region.
Pandemic Period Consequences
During the pandemic, when millions of workers were covered under the government-supported job retention program, and pandemic lockdowns limited opportunities for spending, the information reveals numerous families were able to save, increasing their wealth.
Higher-income households achieved superior outcomes, though. "The median home in the bottom income bracket saw their liquid savings rise by merely £80 during the COVID years (from 2019 to 2022), approximately equivalent to the 24 months before COVID. On the other hand, the median home in the top income bracket saw their liquid savings increase by £4,200," the report finds.
