According to recent research, the typical earner in the UK would require 52 years' worth of salary to reach the net worth of the richest 10% of the population.
Widening Financial Divide Over Time
The analysis reviewed wealth distribution statistics including the Covid pandemic period and determined that during the mid-2000s, it would have taken nearly four decades of average worker salary to join the top 10th of the economic ladder.
A research lead involved with the report stated: "Economic disparities in Britain are currently so significant that a regular employee saving all their earnings throughout their career would remain unable to reach the top of the economic scale."
Measuring the Wealth Divide
The research revealed that the difference between the assets of the average person and an individual in the wealthiest decile was £1 million in the mid-2000s, but had expanded to 1.3 million pounds in actual value by recent times.
The researcher added: "These differences are particularly worrying as financial progression in Britain is limited – those who commence life well-off tend to continue being rich, and conversely applies."
Relative Wealth Inequality
Although the economic divide growing in actual numbers, the percentage of total wealth in the UK held by the richest households – known as "relative wealth inequality" – has been "mostly consistent since the 1980s era," as stated in the study.
Throughout these years, complete net worth in the UK increased dramatically from three times the annual GDP, to almost 7.5 times.
Contributors of Financial Divide
So-called "unearned" appreciation, through rising house prices and changes in pension valuations, were the key contributors of the widening wealth gap over the past decade, per the analysis.
These appreciations typically went to senior citizens with real estate, the research shows – intensifying the intergenerational wealth divide.
Intergenerational Wealth Disparities
The median economic difference between individuals aged 30-34 and people aged 60-64 increased over twofold in inflation-adjusted terms, from £135k in 2006-08, to £310k.
Geographic Variations
There were also stark geographic differences, with the typical amount of wealth in 2020-22 reaching £290,000 in south-east England, where housing costs have tended to rise rapidly, compared with £110k in the north-east.
Health Crisis Years Effects
Throughout the COVID period, when millions of workers were covered under the public-funded employment protection, and Covid shutdowns reduced expenditure possibilities, the statistics indicate many households were able to save, increasing their wealth.
Higher-income households fared much better, nevertheless. "The average household in the bottom income bracket saw their liquid savings increase by just £80 throughout the health crisis (across the pandemic timeframe), approximately equivalent to the pre-crisis period. On the other hand, the average household in the wealthiest fifth saw their liquid savings increase by £4,200," the study reveals.
