Based on fresh study, the median worker in the UK would require 52 years' worth of income to reach the financial standing of the wealthiest 10% nationwide.
Growing Financial Divide Through the Years
This research analyzed wealth distribution statistics including the Covid pandemic period and found that back in the pre-financial crisis era, it would have needed nearly four decades of average worker salary to join the top 10th of the economic ladder.
An economic expert associated with the report observed: "Wealth gaps in Britain are presently so substantial that a average worker saving all their earnings across their entire working life would remain unable to reach the top of the financial hierarchy."
Measuring the Economic Gap
The research discovered that the difference between the assets of the average person and someone in the richest segment was £1m in 2006-08, but had widened to 1.3 million pounds in inflation-adjusted terms by recent times.
The economist further stated: "These differences are doubly concerning as wealth mobility in Britain is limited – those who commence life well-off tend to stay wealthy, and conversely applies."
Relative Wealth Inequality
Although the financial disparity growing in specific figures, the share of total wealth in the UK owned by the richest households – called "proportional economic disparity" – has been "broadly stable since the 1980s," per the research.
Over this timeframe, total wealth in the UK increased dramatically from thrice the annual GDP, to approximately 7.5x.
Drivers of Financial Divide
Referred to as "passive" increases, through growing real estate costs and changes in retirement fund assessments, were the primary factors of the expanding economic divide from 2010 onward, according to the study.
These increases typically went to older, property-owning households, the research shows – worsening the age-based economic gap.
Generational Financial Divides
The typical financial disparity between people in their early 30s and people aged 60-64 grew by more than 100% in actual value, from £135,000 in the mid-2000s, to £310,000.
Regional Variations
Additionally, there were stark geographic differences, with the average level of net worth in 2020-22 reaching £290k in the SE of England, where real estate values have typically increased quickly, as opposed to 110 thousand pounds in the NE of England.
Pandemic Period Impact
During the pandemic, when millions of workers were protected by the government-supported job retention program, and pandemic lockdowns limited opportunities for spending, the data shows countless homes were able to save, enhancing their financial standing.
Higher-income households fared much better, nevertheless. "The median home in the bottom income bracket saw their liquid savings increase by just £80 over the pandemic period (from 2019 to 2022), broadly the same as the pre-crisis period. Conversely, the typical family in the highest income quintile saw their cash reserves increase by £4,200," the report finds.
