According to new analysis, the median worker in the UK would require 52 years' worth of earnings to reach the net worth of the richest 10% of the population.
Widening Economic Disparity Through the Years
The study analyzed financial assets information covering the 2020-22 timeframe and found that back in the pre-financial crisis era, it would have taken 38 years of typical employment income to join the wealthiest decile of the economic ladder.
A senior economist associated with the report stated: "Financial divides in Britain are currently so significant that a typical full-time employee setting aside their entire income throughout their career would continue to be incapable to achieve the peak of the economic scale."
Quantifying the Economic Gap
The study discovered that the difference between the wealth of the median citizen and someone in the wealthiest decile was £1 million in the mid-2000s, but had expanded to £1.3 million in actual value by recent times.
The analyst added: "These gaps are particularly worrying as economic movement in Britain is restricted – individuals who begin life wealthy tend to continue being rich, and conversely applies."
Proportional Economic Disparity
Despite the financial disparity growing in absolute terms, the portion of overall assets in the UK held by the wealthiest families – called "proportional economic disparity" – has been "largely unchanged since the 1980s era," according to the study.
During this period, complete net worth in the UK surged from three times the gross domestic product, to approximately 7.5x.
Factors of Financial Divide
Termed "passive" appreciation, via increasing property values and changes in retirement fund assessments, were the key contributors of the growing financial disparity from 2010 onward, as stated in the report.
These appreciations typically went to older, property-owning households, the study demonstrates – intensifying the intergenerational wealth divide.
Intergenerational Financial Divides
The median economic difference between people in their early 30s and those in their early 60s increased over twofold in actual value, from 135 thousand pounds in 2006-08, to £310k.
Area-Based Variations
There were also pronounced regional variations, with the typical amount of wealth in the pandemic period amounting to £290k in south-east England, where housing costs have generally grown substantially, as opposed to £110k in the NE of England.
Health Crisis Years Impact
Throughout the COVID period, when millions of workers were protected by the taxpayer-backed furlough scheme, and health crisis restrictions limited opportunities for spending, the statistics indicate countless homes were able to save, growing their net worth.
Wealthier families performed significantly better, nevertheless. "The typical family in the lowest-income quintile saw their cash reserves grow by only eighty pounds during the COVID years (2019-20 to 2021-22), roughly identical to the 24 months before COVID. Conversely, the average household in the top income bracket saw their available funds increase by £4,200," the report finds.
