Based on fresh analysis, the average earner in the UK would require half a century of salary to reach the financial standing of the most affluent 10% of the population.
Growing Wealth Gap Over Time
This research examined wealth distribution data including the Covid pandemic period and determined that back in the mid-2000s, it would have required nearly four decades of median full-time earnings to join the wealthiest decile of the wealth distribution.
A senior economist involved with the study observed: "Wealth gaps in Britain are presently so substantial that a regular employee saving all their earnings during their working years would continue to be incapable to attain the highest level of the economic scale."
Assessing the Wealth Divide
The study revealed that the disparity between the net worth of the median citizen and a person belonging to the top 10% was £1m in the pre-crisis period, but had expanded to 1.3 million pounds in real terms by recent times.
The economist further stated: "These gaps are especially alarming as economic movement in Britain is low – people that start life wealthy tend to remain affluent, and the opposite holds true."
Proportional Economic Disparity
Despite the financial disparity widening in absolute terms, the share of total wealth in the UK owned by the richest households – known as "proportional economic disparity" – has been "mostly consistent since the 1980s," per the study.
Over this timeframe, complete net worth in the UK increased dramatically from thrice the yearly economic output, to nearly seven and a half times.
Factors of Wealth Inequality
Termed "automatic" appreciation, through growing real estate costs and variations in pension valuations, were the main drivers of the widening wealth gap from 2010 onward, according to the study.
These gains generally flowed to elderly homeowners, the study demonstrates – worsening the generational financial disparity.
Age-Based Economic Gaps
The average wealth gap between thirty-somethings and those in their early 60s grew by more than 100% in inflation-adjusted terms, from £135,000 in pre-financial crisis, to £310,000.
Geographic Variations
Furthermore, the study revealed stark area-based disparities, with the average level of wealth in the pandemic period amounting to £290,000 in the southeastern region, where property prices have generally grown substantially, as opposed to £110k in the NE of England.
Pandemic Period Consequences
During the pandemic, when countless laborers were protected by the taxpayer-backed furlough scheme, and pandemic lockdowns curtailed consumption options, the statistics indicate many households were capable of accumulating, increasing their wealth.
Higher-income households fared much better, however. "The average household in the poorest fifth saw their cash reserves grow by only eighty pounds over the pandemic period (across the pandemic timeframe), approximately equivalent to the two years pre-pandemic. In contrast, the typical family in the top income bracket saw their available funds rise by £4,200," the study reveals.
