Per new research, the median employee in the UK would require 52 years' worth of earnings to reach the net worth of the richest 10% nationwide.
Growing Economic Disparity Across Decades
The study reviewed financial assets statistics from the recent health crisis years and found that in the pre-financial crisis era, it would have taken 38 years of average worker salary to enter the richest segment of the financial hierarchy.
An economic expert associated with the report commented: "Financial divides in Britain are now so large that a average worker saving all their earnings during their working years would continue to be incapable to reach the top of the financial hierarchy."
Measuring the Financial Disparity
The analysis discovered that the disparity between the wealth of the typical individual and a person belonging to the wealthiest decile was £1 million in the mid-2000s, but had widened to £1.3 million in inflation-adjusted terms by the pandemic years.
The analyst added: "These gaps are particularly worrying as wealth mobility in Britain is limited – people that start life well-off tend to continue being rich, and the opposite holds true."
Relative Wealth Inequality
Even with the financial disparity growing in specific figures, the portion of total wealth in the UK held by the most affluent homes – termed "proportional economic disparity" – has been "broadly stable since the 1980s," as stated in the analysis.
Throughout these years, overall assets in the UK rose substantially from triple the annual GDP, to nearly seven and a half times.
Drivers of Financial Divide
So-called "automatic" appreciation, through increasing property values and adjustments to superannuation evaluations, were the main drivers of the widening wealth gap from 2010 onward, according to the analysis.
These gains generally flowed to elderly homeowners, the study demonstrates – exacerbating the intergenerational wealth divide.
Age-Based Wealth Disparities
The average wealth gap between thirty-somethings and those in their early 60s more than doubled in inflation-adjusted terms, from £135,000 in pre-financial crisis, to £310,000.
Area-Based Variations
Additionally, there were pronounced geographic differences, with the average level of net worth in the pandemic period amounting to £290,000 in the southeastern region, where property prices have typically increased quickly, compared with £110,000 in the northeastern region.
Health Crisis Years Effects
Amid the health crisis, when millions of workers were covered under the public-funded employment protection, and health crisis restrictions reduced expenditure possibilities, the data shows many households were capable of accumulating, growing their net worth.
More affluent homes achieved superior outcomes, however. "The median home in the poorest fifth saw their liquid savings rise by merely £80 over the pandemic period (2019-20 to 2021-22), approximately equivalent to the pre-crisis period. On the other hand, the median home in the wealthiest fifth saw their available funds increase by £4,200," the study reveals.
